Taurus Mutual Fund Drags Avantha Holdings To NCLT

Taurus Mutual Fund dragged Avantha Holdings to National Company Law Tribunal (NCLT) for default by its subsidiary Ballarpur Industries Ltd. (BILT) on its commercial paper amounting to Rs 100 crore issued to the fund house.

The case is listed for hearing by the tribunal in New Delhi on Tuesday, according to the NCLT website.

Avantha Holdings is the parent company of BILT.

Last week another fund house, IDBI Mutual Fund, had moved the tribunal in Mumbai against BILT for non-payment of maturity proceeds worth Rs 30 crore. Now, Taurus Mutual Fund has filed winding up petition against Avantha Holdings at the NCLT.

Officials at Taurus Mutual Fund could not be reached for comments.

The issue first came to light when four debt funds of Taurus Mutual Fund, which owns Rs 100 crore of commercial paper issued by BILT, marked down their net asset values (NAV) by 7-12 percent each after India Ratings and Research (Ind-Ra) downgraded BILT to default status.

Apart from IDBI and Taurus Mutual Fund, three fund houses which have significant exposure in Ballarpur Industries include DHFL Pramerica, Invesco and Reliance Mutual Fund. However, these three fund houses have managed to take it off their books.

The debt-oriented schemes of Taurus MF had bought short term commercial paper (CP) issued by Ballarpur Industries. This paper had maturity dates between February 20 and 27, 2017.

On February 20, BILT was unable to honour its maturity obligation. As a result, the schemes of Taurus MF which were holding this paper as a part of their portfolio did not receive the full amount and Taurus MF marked down the valuation of the CPs issued by BILT.

Sources told PTI that Avantha Holdings had issued a Corporate Guarantee for CPs issued by BILT against which Taurus Mutual Fund has filed a winding up petition against Avantha Holdings in NCLT at New Delhi.