UltraTech Questions Binani Cement’s Resolution Process

UltraTech Cement calls resolution process Binani Cement “fraudulent”.

Indian labourers unload bags of cement from a truck in Gurugram, India (Photographer: Adam Ferguson/Bloomberg News)
Indian labourers unload bags of cement from a truck in Gurugram, India (Photographer: Adam Ferguson/Bloomberg News)

Aditya Birla group firm UltraTech Cement Ltd. today told the Kolkata bench of the National Company Law Tribunal that the process followed by the resolution professional and the committee of creditors while evaluating the bids for Binani Cement was “fraudulent”.

Appearing on behalf of UltraTech Cement, Senior Advocate Mukul Rohatgi questioned the process followed by the lenders of Binani Cement led by Bank of Baroda in selecting rival Dalmia Bharat Group as the highest bidder. He submitted that UltraTech apprehends that it was not declared as the H1 bidder in view of the penalty imposed by the Competition Commission of India.

On Feb. 27, 2018, CoC informed that UltraTech is the H2 bidder.

According to him, UltraTech was not given an opportunity to explain its case that the penalty imposed by CCI was subsequently removed and that it should have therefore been regarded as H1.

UltraTech today concluded its argument before the NCLT and the hearing will continue tomorrow. The Kolkata bench of the NCLT is hearing the matter regarding sale of Binani Cement by the CoC to recover dues of Rs 7,000 crore.

Lenders have approved a Rs 6,500 crore bid by Rajputana Properties, a subsidiary of rival Dalmia Bharat group.

However, later Binani Industries, which holds 98.4 percent share in Binani Cement approached UltraTech and following which the Aditya Birla group entered into an agreement to buy its stake at Rs 7,200 crore, which was Rs 700 crore more than Dalmia Bharat’s offer.

Earlier, both NCLT and NCLAT had suggested the parties to go for out-of-court settlement in the matter. However, the CoC did not agreed to the UltraTech’s offer and the matter came up for hearing again before NCLT, which is a final authority to approve the resolution plan.