NCLT’s Mumbai bench asks Silverdale Services, the investor backing workers’ union, to submit financial statements by Thursday.
Mumbai: A group of employees at premium apparel firm Reid & Taylor India Ltd, which is on the brink of liquidation, has come together to acquire the company by bringing in a potential investor and getting the National Company Law Tribunal (NCLT) to stay the insolvency proceedings.
The workers’ union, called the Reid & Taylor India Ltd Employee Welfare Association, comprises more than 200 employees of the company, according to a report in The Economic Times.
The Mumbai bench of the tribunal Tuesday asked the investor backing the union, Silverdale Services, a subsidiary of Hong Kong-based SP Growth Partners, to submit its financial statements up to 2018 by Thursday after getting them certified by a chartered accountant.
The move is aimed at establishing the investor’s credentials to submit a resolution plan for the sinking fashion company, owned by the Kasliwal-family run S. Kumar Group.
The NCLT has also asked the resolution professional to get in touch with an unnamed United Kingdom-based investor who has evinced interest in the firm.
Reid & Taylor owes more than Rs 4,100 crore to banks and other lenders. Edelweiss Asset Reconstruction Company, one of the creditors, dragged the company to the NCLT in March 2018 and the case was admitted in April 2018.
The committee of creditors opted for liquidation on 14 December last year as there was no resolution proposal despite eight expressions of interest.
Also read: Insolvency and Bankruptcy Code, NCLT have improved borrowing & lending since Congress era
The union, then unregistered, made an application to the NCLT on 19 December saying its investor was interested in submitting a resolution plan.
It later registered itself as Reid & Taylor India Ltd Employee Welfare Association.
The tribunal heard the union’s application on 1 January and decided to stay the liquidation process, extending the corporate insolvency resolution process (CRIP) even as the 270-day period for a resolution proposal for the company had expired.
The tribunal said that given the background and the quality of the products at the firm, with their premium value, it was of the view that “an opportunity may be given to the employees’ association in view of the fact that, if the company is liquidated, considering the meagre liquidation value, the creditors will be most affected and the workmen will be losing their livelihood and having been convinced that there is seriousness in the efforts made by the workers”.
The employees belong to the company’s Mysuru plant, which is currently functioning at just about 20-30 per cent of its production capacity. The union leaders say that they found the investor through their network of dealers and agents.
Meanwhile, Finquest Financial Solutions, one of Reid & Taylor’s creditors, moved the National Company Law Appellate Tribunal against the CRIP extension. Finquest has an exposure of more than Rs 750 crore to Reid and Taylor.
Also read: The rise & fall of Amrapali, from real estate giant to company struggling to pay its dues