After Ultratech, Binani Industries snubbed by SC, Binani Cement lenders make this big demand

The troubled Binani Cement’s operational creditors will now be looking at raising a demand for a forensic audit of resolution process and the removal of resolutional professional. The planned move comes after the Supreme Court last week rejected the demand for an out-of-court settlement between the promoter Binani Industries and UltraTech, the cement arm of Aditya Birla group. As per the plans, the operational creditors would now press for charges, including misrepresentation by the resolution professional, discrimination against different classes of operational creditors, non-verification of their claims and also question the constitutional validity of the Insolvency and Bankruptcy Code (IBC).

“In their plea, to be heard on April 19, Binani Operational Creditors Forum (BOCF) seeks forensic audit of resolution process citing irregularities by resolution professional and adherence to only one maxim of the IBC Code, which is maximisation of value,” an official of the forum said. “BOCF has sought to bring to limelight the travesty of justice being perpetuated by Dalmia Bharat in the name of settlement in cahoots with the resolution professional,” a statement issued by the forum said. “The petitioners, who are some of the operational creditors who provide goods and services to Binani Cement, were led to believe by the resolutional professional that the whole of operational creditors’ outstanding would be cleared, and that they should continue giving supplies to BCL even during moratorium period,” the petition filed by these supplier to the Supreme Court says.

Apart from these charges, BOCF has also challenged constitutional validity of the IBC as it unduly and inadvertently favours financial creditors over and above all other categories of creditors. Initially, operational creditors or unpaid suppliers of inputs and services to Binani Cement’s plant were planning to lobby for an out-of-court settlement with UltraTech, which had promised to settle all the dues covering financial, operational, secured as well as unsecured creditors of Binani Cement.

In contrast, Dalmia Bharat, the operational creditors claim, would only be paying 15% of their aggregate dues.

(By Sumit Moitra, DNA Money)