The next large account in front of National Company Law Tribunal (NCLT) could be Anil Ambani’s Group company i.e. Reliance Naval & Engineering Company.
Reliance Naval & Engineering was known as Pipavav Defence and Offshore Engineering, which went sick in 2013 and was renames and taken over by Anil Ambani, also continued to invest heavily into the firm till January 2018.
However, almost major investment by Ambani’s group company had been used towards payment to lenders of Reliance Naval & Engineering.
The net loss reported by Reliance Naval & Engineering for the last financial year ended March 2019 is Rs 9,399 crore against just Rs. 406 crore the previous year.
Now, the company is under the debt of Rs.9,000 crore and with no viable proposals for equity investments or for repayment such debt, the financial creditors led by IDBI Bank have decided to approach the NCLT under the Insolvency and Bankruptcy Code for a corporate insolvency resolution process (CIRP).
On 7th June, RBI issued a circular , which had allowed lenders 30 days to resolve almost 70 loan accounts amounting to over Rs 2000 crore each and totalling Rs 3.8 lakh crore or to refer them to the National Company Law Tribunal for bankruptcy proceedings.
However, the lender had already filed an application for insolvency proceedings to be initiated against Reliance Naval last year.
Besides that Last year March, 2019, Reliance Infrastructure, another Anil Ambani group company had provided for funds to be invested in Reliance Naval. Due to this Reliance Infrastructure is also in trouble with its statutory auditors resigning on grounds of dissatisfaction over allocation of funds by the management.