IDBI Bank has stated that it rejected the one-time settlement bid made by Siva Industries’ promoters, who are part of Aircel owner C Sivasankaran’s party because it would have lost more money otherwise.
In 2019, IDBI Bank filed for bankruptcy against Siva Industries. The loans were obtained by a group corporation that combined with Siva Industries later on. Authorities are investigating Sivasankaran for causing a loss to banks.
According to banking reports, IDBI Bank has already written to the CBI, confirming that commercial transactions would not interfere with the criminal investigation process. “The bank’s recovery through one-time settlement will be higher than its recovery through NCLT liquidation based on the valuation of assessable assets.”
This OTS (one-time settlement) and withdrawal from the NCLT have no bearing on the CBI complaint. The CBI case is still ongoing, according to IDBI Bank.
Lenders, led by IDBI Bank, had launched bankruptcy proceedings against the firm, with claims totalling more than Rs5,000 crore. The International Asset Reconstruction Company owned 22% of the admitted debt, led by IDBI Bank (17%) and Union Bank of India (13%).
However, IDBI Bank claims that the OTS provides a better bargain.
Although the insolvency procedure does not authorise defaulting promoters to buy their business, bankers may reach a one-time deal with lenders if a sufficient number of them agree.
In a social media post, IDBI Bank responded to the allegations, saying that although Siva Industries was referred to the NCLT by lenders in July 2019, no achievement was accomplished.