24 June 2019: The bankruptcy court has approved a proposal to liquidate S Kumars Nationwide (SKNL), after its lenders failed to receive any viable revival plan for the textile company. This is the second Nitin Kasliwal-promoted firm to go into liquidation. In February, the Mumbai bench of the National Company Law Tribunal (NCLT) had ordered the liquidation of apparel maker Reid & Taylor India.
S Kumar Nationwide owes around Rs 7,970 crore to its financial creditors. IDBI Bank filed the insolvency petition against the company in April last year after it defaulted on loans of Rs 1,680 crore.
The company’s committee of creditors evaluated seven bids, including from Finquest Financial Solutions, which was one of the financial lenders to Reid & Taylor India. The committee decided to go for liquidation in the absence of any viable revival plan. S Kumars Nationwide’s resolution professional, Devendra Prasad, moved the NCLT for its liquidation. NCLT’s Mumbai bench, presided over by Justice MK Shrawat, questioned the lender’s processes to grant big loans.
“The liquidation value as per the valuer is only Rs 350.94 crore. It appears to me that while granting exorbitant loan facilities, as well as while voting for liquidation, at both the occasions, there was a lack of due diligence on the part of the lenders,” said the tribunal, in its order of June 19.
As per the NCLT order, 79.73 per cent of lenders voted in favour of liquidation. The tribunal has appointed Om Prakash Agarwal as the liquidator. Nishit Dhruva, the managing partner of law firm MDP & Partners, confirmed the development. On February 5, the NCLT ordered the liquidation of Reid & Taylor India after investors put up by employees’ associations and other bidders failed to come up with a revival plan.