In a major setback to banks, the NCLT Friday sent Sterling Biotech for liquidation, rejecting the lenders' led by Andhra Bank, plea to withdraw the insolvency process and allow a one-time settlement with the absconding promoters, the Sandesara brothers.
A National Company Law Tribunal (NCLT) bench of judges VP Singh and Ravikumar Duraisamy said as they have not received a resolution plan within the time, leaving them with no other option but to order liquidation.
Further, the order stated that the amount deposited by the absconding promoters for the one-time settlement shall not be released to the applicant.
The lenders have already got a little over 5 percent of the default amount of Rs 179.67 crore from the outstanding amount on the day of default.
The lenders, led by Andhra Bank, had sought the tribunal's approval after accepting the one-time settlement from the Sandesara brothers, the fugitive promoters of Sterling Biotech.
The banks had approved a one-time settlement offer from the Sandesaras of around Rs 3,945 crore out of the Rs 7,500 crore they owe to the lenders.
Apart from defaults, the promoters are also accused of fraud and are being investigated by the CBI, the ED and the Serious Frauds Investigation Office for money laundering. They have reportedly attached assets worth Rs 4,700 crore.
The Sterling group owes over Rs 15,600 crore to its financial and operational creditors. While the flagship Sterling Biotech owes over Rs 7,500 crore, sister concern Sterling SEZ owes over Rs 8,100 crore.