Mumbai: Patanjali Ayurved Ltd has challenged the approval of Adani Wilmar’s bid for Ruchi Soya Ltd’s acquisition, arguing that under the insolvency and bankruptcy code, relatives of a wilful defaulter can’t participate in a bidding process. On Monday, senior counsel J.P. Sen—representing Patanjali Ayurved—argued that the company is challenging the bid process as it violates the Section 29 (A) of the bankruptcy law.
“We are challenging the matrix of the evaluation process for the bidding because we feel that the goal post has been changed,” argued Sen.
As per the Section 29 (A), a resolution applicant (bidder) is ineligible to submit a plan if connected to a person who meets any of the ineligibility criteria. The definition of connected person makes reference to related party which in turn lists relatives as well.
Patanjali has sought Adani Wilmar’s disqualification on the ground that Pranav Adani, managing director of Adani Wilmar, is related to Vikram Kothari, the earlier promoter of Rotomac Group.
Patanjali’s counsel also sought to know the details of the debt resolution plan submitted by Adani Wilmar, but lawyers representing Adani Wilmar as well as the resolution professional opposed this saying that there is no such provision under which a party who has not won the bid can seek such documents.
Ravi Kadam, senior counsel representing the resolution professional, and advocate Zal Andhyarujina—appearing for Adani Wilmar—also sought more time to file their reply in a petition filed by Patanjali.
The tribunal will hear the case next on 7 September.
Patanjali Ayurved had last week moved the Mumbai bench of the National Company Law Tribunal (NCLT), challenging the move of Ruchi Soya’s committee of creditors (CoC) to choose Adani Wilmar over it. About 97% of lenders of debt-laden Ruchi Soya had voted in favour of the Gautam Adani-promoted Adani Wilmar.
Adani Wilmar’s offer for Ruchi Soya entails a 60% haircut for the banks.
The statutory 270-day deadline for the debt resolution will complete on 12 September.
Patanjali Ayurved had earlier alleged that the bidding process was not followed properly. It had also raised concerns on law firm Cyril Amarchand Mangaldas advising Ruchi Soya’s resolution professional Shailendra Ajmera as well as Adani Wilmar.
That issue was settled when Cyril Amarchand Mangaldas resigned and Luthra and Luthra Law Office came on board to advise Adani Wilmar.
Ruchi Soya is part of the so-called second list of 28 defaulters the Reserve Bank of India (RBI) flagged for resolution under its schemes before December 2017, failing which these cases were to be referred to the NCLT. The tribunal admitted Ruchi Soya for insolvency resolution process in December.