State Bank of India (SBI) is likely to invite fresh bids to select interim resolution professionals (IRP) for Videocon Industries Ltd and Videocon Telecommunications Ltd due to lack of tranparency in the previous bidding,
“The consultancy firms who participated in the bidding process earlier had taken up the issue of lack of transparency with SBI, as many had quoted a lower price and had more personnel to deploy to undertake the resolution process,” sources told the newspaper on condition of anonymity.
SBI had invited bids for selecting the IRP in the last week of December, following which Alvarez & Marsal was named the IRP.
Sources said that SBI has formed an internal committee to address the concerns around the process through which Alvarez & Marsal was selected as IRP. Following which, the committee had invited consultancy firms including the “Big Four” to understand their grievances and take suggestions.
“SBI had set up a panel internally to look into the matter. They called us for questioning as well. Fresh round of bidding will be held but so far, the date has not been notified,” a source told the newspaper.
SBI is the lender for both the companies, which were listed in the Reserve Bank of India’s second list of defaulters against whom banks were directed to file insolvency petitions if they could not finalize resolution plans by 31 December.
The bank has initiated insolvency proceedings against the two companies earlier this month, however, the National Company Law Tribunal has not admitted the petitions yet.
Under the insolvency and bankruptcy proceeding, a financial creditor who initiates the insolvency resolution process files an application proposing the appointment of an interim resolution professional. If there are no pending disciplinary proceeding against this person, he/she becomes the interim professional agency.
The IRP is responsible for collecting financial information about the firm, forming a panel of creditors, collating claims from creditors, and managing the company’s operations until the committee of creditors appoints a resolution professional.
Videocon Group chairman Venugopal Dhoot told the paper he was unaware of the development.moneycontrol