NEW DELHI: The Insolvency and Bankruptcy Board of India (IBBI) has moved the bankruptcy court seeking action against Liberty House for defaulting on the payment for Amtek Auto. The IBBI has moved court under Section 74 of the Insolvency and Bankruptcy Code (IBC). According to sources, the court has issued a notice to Liberty House asking why IBC Section 74 should not be invoked against it, as lenders seek strict punishment for the firm as it threatens to derail the insolvency process.
The Liberty House failed to bring in money within the stipulated time for Amtek Auto, prompting NCLT to allow its creditors to go for a fresh round of bidding. This is not the first time that Liberty House has failed to meet the payment deadline after emerging as the successful bidder for a company facing bankruptcy. Liberty House Group has failed to pay its Rs 410 crore offer for the stressed steel company Adhunik Metaliks within the deadline set by the bankruptcy court.
While the company claimed that lack of statutory approvals was responsible for the delay, several industry insiders said that it just could not secure funds to pay. The company was also the sole bidder for ABG Shipyard, which finally went for liquidation. The Liberty House could not manage to take over any of the firms it had bid for, prompting the authorities to initiate action against the company.
The IBBI is planning to penalise many other ‘flippant’ bidders and stressed assets managers to help quicken the recovery of banking funds locked in bad loans. As per media reports, the IBBI has filed nearly a dozen cases in the last two months to punish frauds linked to bankruptcies.