New Delhi, Mar 7 (IANS): Pipavav Shipyard, the largest drydock of India is undergoing CIRP for last more than two years, i.e. January 2020.

Hazel Mercantile Limited, in consortium with Swan Energy Limited, is one of the Resolution Applicants and they had filed their proposal in September 2021 without disclosing that Nikhil Merchant is non-compliant of Section 29A of IBC. The second Resolution Applicant is Navin Jindal Group Company.

Nikhil Merchant, MD, Swan Energy Limited, has been a Director in Navi Mumbai Smart City Infrastructure Limited, a company promoted by Nikhil Gandhi and Bhavesh Gandhi (a non-performing, wilful defaulter under the RBI Guidelines and thus ineligible to participate in CIRP process u/s 29A of IBC) from 2015 till December 2021.

During September to December 2021, Resolution Professional (RP), Sudip Bhattacharya had conducted several meetings of Committee of Creditors (COC) and at no point of time did RP bring out the fact that Merchant continuing on the Board of a wilful defaulter company, promoted by Nikhil Gandhi.

Incidentally, Pipavav Shipyard is also promoted by Nikhil Gandhi and Merchant is ineligible and therefore, Swan Energy Limited is ineligible to participate under the CIRP process.

Similarly, Minesh Shah, a Director on the Board of Hazel Mercantile Limited, without disclosing that Shah is non-compliant of Section 29A of IBC, as he was also continuing on the board of various companies of HDIL Limited, another wilful defaulter and with fraud red-flag, whose promoters have already been jailed. Therefore, even Hazel is ineligible to participate in CIRP process u/s 29A of IBC.

In the wisdom of few lenders, they directed Sudip Bhattacharya (RP) to get a report from Independent Accountant to confirm whether the consortium of Hazel & Swan is eligible to participate under CIRP process or not.

Accordingly, RP appointed Amit Ray & Co, Chartered Accountants. They in their Report have informed to the RP and COC about these facts and not giving any categorical finding that these two companies are eligible.

It is the RP who in his wisdom decided to classify and give clean chit to the consortium of Hazel & Swan as being eligible, sources said.

Questions have arisen as to why did RP not bring these points immediately in the first COC held after submission of such plans. It is mandatory and an obligation on RP to undertake strictest diligence for examining eligibility, which the RP failed.

Had the lenders in the COC not have demanded examination, the said facts would have never come to light, sources said.

Inspite of no categorical confirmation from the Independent Chartered Accountant's report, RP has decided to proceed on the assumption that they are eligible.

It is shocking that in the COC meeting held on February 23, 2022, that in spite of PNB, BOI & SBI (more than 25 per cent of voting strength of COC) and SBI being de facto lead/largest lender to give sufficient time to examine the proposals in details and seek their respective internal approvals, RP summarily dismissed this request.

The question arises as to why did RP not order/ask for a forensic audit for the period from 2011 to FY 2015-16, the period in which the erstwhile promoters, Nikhil Gandhi, Bhavesh Gandhi and their Group Company, SKIL, had siphoned off thousands of crores, which is on record, similar to what has been done by ABG promoters. There are enquiries going on but RP has made sure that the same are buried. Had this forensic audit been conducted, even the nexus with the lenders would have come out in the open, sources said.

In this case over 92 per cent haircut is being taken by lenders. This is nothing but a deferred liquidation and similar to what has been observed by NCLT/NCLAT in the matters of Shiva Industries, Twin Star (Videocon), Aircel.

RP has taken 4 extensions, i.e. till the time RP become confident (on receipt of revised Resolution Plans, i.e. after knowing the competition bid) that his conspiracy in league with Nikhil Merchant will be successful, he refused to give time to lenders and extend the voting schedule, sources said.

Sources said a new large scale scam/scandal in the process of fructifying if immediate steps are not taken by COC, IBBI and all other relevant agencies. It is similar to what has now been unearthed in ABG.