A forensic audit of the accounts of both the companies, that owe Rs 63,500 crore, would be conducted; after which if there is evidence of siphoning off of funds or fraudulent activities in the companies, they could face criminal prosecution, said those people who did not want to be identified.
Lanco is an infrastructure group with interests in roads and power. It was promoted by L Madhusudhan Rao and L Rajagopal, a former member of the Parliament from Vijayawada who created a stir by using pepper spray in Parliament during the debate on bifurcation of Andhra Pradesh. The family owns 58 per cent of the company.
Ship builder ABG was founded by Rishi Agarwal, a nephew of the Ruia brothers of Essar Steel which is also facing bankruptcy proceedings. The Agarwals’ holding in the company has fallen to 9.7 per cent from as high as 68 per cent a few years ago after lenders converted a part of the loan into equity.
“At a recent meeting among lenders it was decided to conduct forensic audit of the operations and financial transactions of both the companies — Lanco Infratech and ABG Shipyard,” said one of the persons quoted above. “This exercise is a prelude to declaring the promoters of Lanco and ABG Shipyard as wilful defaulters.”
A wilful defaulter is one who is identified as one with the potential to repay loans, but does not do so.
“The question of being a wilful defaulter does not arise as the finances are not being controlled by the erstwhile promoters but the lenders and Resolution Professional,’’ ABG said in a statement. The Resolution Professional has also conducted a forensic audit. The company has already gone through two audits and if the lenders want to initiate another forensic audit the company would co-operate with the lenders and the auditors as it had done in the past.’’
Lanco did not respond to an email seeking comment.
ABG has gone under the hammer thrice but there were no takers. Resolution professional Sundareshan Bhat received just one bid on Monday – the last day, from the UK-based metals group Liberty House, said a person familiar with the developments. The bids will be opened later this week. Liberty House had earlier offered Rs 2,000 crore which was a combination of cash and long-term bonds.
Lanco Infratech has received seven bids, including from Ingen Capital group, I Square Capital, Asia Advisors, Metro Asset Services, Penn Energy, Than Solar Power and Solar Land.
“Although not all bidders have bid for all assets. Some of them have even asked for extension for submitting bid bond guarantee,” said a banker.
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