JAL insolvency case: Lenders flag ‘leak’ that may have aided Vedanta bid
MUMBAI/NEW DELHI: In a new development in Jaiprakash Associates Ltd’s (JAL) insolvency case, the Committee of Creditors (CoC) on Monday told the appellate court that a possible leak of information may have prompted Vedanta Ltd to review its bid for the bankrupt firm.
Appearing before the National Company Law Appellate Tribunal (NCLAT) on behalf of the CoC, Solicitor General Tushar Mehta said: “Vedanta was lagging behind in the first and fifth parameter, but somehow they came to know about it. And in our case there was some leakage which should not have happened because it compromises the sanity and integrity of the process.”
The NCLAT’s principal bench, led by Justice Ashok Bhushan, was hearing Vedanta’s plea challenging Adani Enterprises as the highest bidder in the JAL bankruptcy case.
Mehta added that after the alleged leak, Vedanta submitted a revised bid, increasing the values in the first and fifth parameters – net present value (NPV) and equity infusion – which it had lagged behind earlier. The CoC rejected the revised proposal as it was submitted after the deadline.
National Asset Reconstruction Company Ltd (NARCL), one of the largest voting members of the CoC, argued that accepting the revised proposal would require restarting the process and postponing resolution.
“After the tender was finalized, they realized that they would not be successful and came up with this idea,” said lawyer Niranjan Reddy, who also represented the CoC.
The next hearing will be held on April 21.
This development could strengthen Vedanta’s case in the case, lawyers said.
“This is a process integrity issue and Vedanta may argue that there is no level playing field in this case,” said Arka Majumdar, partner at Argus Partners.
On Friday, Abhishek Manu Singhvi, representing the resolution professional, said, “One of the biggest methods of drawing attention to some big sensational issues is to suggest that we (resolution professionals) should declare Mr. (Abhijeet) Sinha’s client (Vedanta) as the best, highest or most suitable and then suddenly change it. The basic premise of this presentation… is as if I had declared you as the highest and then changed it. It is unfair if this happened, and completely without would be basic facts.”
Vedanta’s lawyer Abhijeet Sinha dismissed the allegations as “baseless” and said the company “did not conceal any documents and submitted everything to the court”.
Vedanta also accused the CoC of ignoring its bid even though it was the highest bid after the five-round objection process. On April 16, Sinha said, “There was supposed to be some transparency in the scoring process but there was nothing.”
JAL enters bankruptcy proceedings in 2024. ₹We owe ₹50,000 crore to creditors.
The competition for JAL’s assets includes around 4,000 acres of land in Noida, Greater Noida and along the Yamuna Expressway, along with hotels, commercial assets, cement capacity and a Formula 1 race track.
Adani Enterprises’ resolution plan was approved by the Allahabad bench of the National Company Law Tribunal (NCLT) on March 17, following which Vedanta approached the NCLAT and the Supreme Court seeking a stay of the decision.
On April 6, a Supreme Court bench led by Chief Justice Surya Kant and Justice Joymalya Bagchi refused to interfere with the NCLT and NCLAT’s orders approving the implementation of the scheme. However, he directed the committee overseeing the decision to seek NCLAT approval before taking any major step.
