SBI declared ‘conman’ Sherpuriya’s firm in Ahmedabad NPA in ’14
The State Bank of India (SBI), which put out a notice declaring the alleged conman Sanjay Prakash Rai alias Sanjay Sherpuriya and his wife Kanchan “wilful defaulters” on Thursday, declared his firm Kandla Energy and Chemicals Ltd (KECL) a Non-Performing Asset (NPA) on July 22, 2014. The firm owed Rs 125.95 crore to the bank at the time.
The public notice was issued by the SBI’s Stressed Assets Management Branch in Ahmedabad, following an order by the National Company Law Tribunal (NCLT) Ahmedabad Bench on an application filed by the SBI against KECL on August 8, 2021, under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016. The SBI public notice – that carried photos of the couple – claimed the firm’s dues to SBI were over Rs, 349.12 crore, as on December 31, 2022.
Rai was arrested on Wednesday from Lucknow over alleged fraud worth crores using forged documents with a false reference to the Prime Minister’s Office.
As per an order of the NCLT dated October 21, 2022, the application of the SBI was admitted and the bank was allowed to initiate the Corporate Insolvency Redressal Process (CIRP) with the firm and declare a moratorium under Section 14 of the IBC.
The firm – a manufacturer, supplier, and exporter of hydrocarbon fluids – “has been shut down for many years and there is no scope for the revival of the plant”, the NCLT order said. The SBI had submitted to the NCLT that Rai’s firm had made “several one-time settlement offers to the consortium where the financial creditor is a member. However, the offers issued by the corporate debtor (KECL) being very low have been rejected by the consortium”.
Registered under the Companies Act 1956, the firm was established on March 7, 2005, with its office at “11, Second Floor, Shri Krishna Centre, Nr. Mithakhali Six Road, Navrangpura, Ahmedabad, Gujarat”. On Friday, when The Indian Express visited the office of KECL at this site, it was sealed with a notice citing the NCLT order pasted outside.
The authorised share capital of the limited company, as cited in the NCLT order is Rs 35 crore, and the paid-up share capital of the company is Rs 26 crore.
The Ministry of Corporate Affairs website shows the director of KECL as Sanjay Rai, Kanchan Rai (his wife), and Arun Karwa, who served as the director between March 2012 and May 2015.
The SBI had granted financial assistance of Rs 171.85 crore to the firm as on January 22, 2013, and due to the non-payment of the debt, KECL was classified as NPA on July 22, 2014.
An original application was filed by the bank before Debt Recovery Tribunal, Ahmedabad on October 21, 2015, for a total amount of claim of Rs.125.95 crore. A notice in this regard was issued to the firm on November 2, 2015, under Section 13 (2) of the SARFAESI Act, 2002 asking to pay Rs. 376.58 crore.
As per the order, while the case was pending in the debt recovery tribunal, the company proposed a one-time settlement on December 1, 2016, and April 12, 2017.
As per the order, this was the application made by the bank in 2021, in NCLT under the “period of limitation”. The corporate debtor again came up with a one-time settlement proposal on June 28, 2017, with an amount of Rs. 71 crore, and once on September 22, 2017, with an amount of Rs. 80 crore. The settlement was made valid till June 8, 2018. However, a request to extend the validity of the settlement was asked by the company which was rejected by the bank.
Rai’s firm, at the time of the NCLT order, was in default of total Rs 291.18 crores till April 24, 2014.
Nimai Gautam Shah was appointed as Insolvency Resolution Professional (IRP) for KECL. Shah was unavailable for comment on Friday.