Amidst reports that some lenders are not happy with promoters of stressed companies facing insolvency process participating in bidding process for the troubled assets, State Bank on Monday said they are within their rights to do so. There have been reports that a few lenders and some bidders have objected to promoters bidding for their own stressed accounts.
“Ethical...I don't know, but legally they are within their rights to participate,” SBI chairman Rajnish Kumar told reporters here on Monday.
last week,Essar Group submitted expression of interest for Essar Steel, which is going through insolvency process. “The Essar Group has submitted EoI for Essar Steel. A resolution plan will be submitted to the IRP (independent resolution professional) within the scheduled time frame,” an Essar Group spokesperson had said. Kumar said there is no concern about bidding by existing promoters as there are certain qualification criteria kept by lenders for them to bid.
“There will be a few preconditions from creditors. One is that they should not be willful defaulters and the second is that a forensic audit should clear them of any wrong doings. The third is about the quality of resolution plan they submit,” the chairman said on the sidelines of the annual national banking summit organized by the industry lobby Ficci. Kumar further said the effort to bring in a new promoter is to enhance the enterprise value of the stressed asset.