‘Credibility’ crisis hits Almas Global

Hyderabad: The hush-hush sale of Pawan Hans by the BJP-led government has run into rough weather with the National Company Law Tribunal (NCLT) passing an order last month against Almas Global for failing to make payments to creditors of a Kolkata-based company under an approved resolution plan.

Cayman Island-based Almas Global Opportunity Fund SPC (AGOF) is the biggest shareholder with 49% in the consortium Star9 Mobility, formed just seven months ago and was selected as the winning bidder for Pawan Hans. Following this development, the government has put on hold the sale of Pawan Hans saying “it was legally examining the NCLT order against AGOF”.

NCLT order

AGOF emerged as the successful resolution applicant (SRA) under the Insolvency and Bankruptcy Code, 2016, for EMC Limited, a manufacturer of the power transmission system. “The SRA has taken the entire process for a ride, and nothing can really excuse this audacity. The attitude of the SRA really will tick every parameter that can be applied to satisfy the knowing and wilful contravention test laid down in the Code,” the NCLT said in its April 20 order.

“The SRA has been pussyfooting around with regard to the payments to be made under the approved Resolution Plan, for more than one-and-a-quarter years. There is no point in chasing the chimera of the SRA fulfilling its commitments under the Resolution Plan. SRA has simply hedged its bets by not meeting its obligations, probably because it is earning better returns on income from its existing investments,” it said.

According to a legal expert, the Almas case raises issues regarding the roles of monitoring agencies and the power of NCLTs to ensure that the replacement of one bad management (the company in insolvency) is not replaced with another (Almas).

Meanwhile, Almas on Tuesday said it was moving the National Company Law Appellate Tribunal against the ‘adverse’ ruling. According to the company, just nine weeks before the NCLT order, the fund had requested the Committee of Creditors of EMC for additional time to conclude the transaction. “We find such abrupt order from NCLT is a bit premature as the transaction process is very much on,” the statement said. The stake sale pegged Pawan Hans’ value at Rs 414 crore. Star9 Mobility had made a bid of Rs 211.14 crore for the government’s 51% stake in the company. There is little information in the public domain that talks about the capabilities of the consortium members to run a company like Pawan Hans.

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