Oceanic Edibles International is facing insolvency proceedings as it has defaulted over hundreds of crore
Bad loans resolution turned into an ugly war in Chennai last week when banks passed the proposal to fire the Resolution Professional (RP) because the RP wanted a forensic audit of defaulter company — Oceanic Edibles International.
However, the Indian Overseas Bank-led five lenders have not mentioned any reason for the removal of the RP in the case of Oceanic Edibles International. The company is facing insolvency proceedings as it has defaulted over hundreds of crore, of banks including Central Bank, SBI, IDBI and ICICI. The company defaulted in 2013.
IOB-led consortium of five banks has removed the RP — CA V Vankata Sivakumar — during the fourth CoC (Committee of Creditors) meeting held on February 9, 2018, at Brown Star Hotel at Chennai “without any reason”.
In the fourth CoC meeting, the forensic audit was also in the agenda, but government banks opposed it. According to sources, during the meeting, when the RP called the meeting into order, the General Manager S Kedarnath of IoB suddenly raised his voice, asking the RP to leave.
The RP, his staff (CAs), corporate debtor and their staff, left the meeting room immediately, and entered again after 30 minutes. Again, when the RP started explaining the resolution process, the IoB General Manager proposed the removal of the RP as allegedly advised by the chairman of IoB. The Central Bank’s representative immediately seconded the removal proposal.
Official communications between lenders and RP, seen by DNA, revealed the ugly war between the banks and RP.
DNA contacted the Chennai based RP CA V Vankata Sivakumar, who said: “Yes, I wanted a forensic audit of more than Rs 400 crore loan scam”. He said the stock audit report revealed that “Rs 180 crore worth is not there”. Even “banks have given working capital funds on such a huge stock of Rs 250 crore as against the requirement of just Rs 80 crore.”
Independent directors and audit committee chairman of IOB, K Raghu said DNA over the phone: “I am not aware of it. Maybe, the matter will come up in the next board meeting.”
Emails, calls and messages sent to other IoB officials including CMD of IoB Subramaya Kumar seeking comments on the issue did not elicit any response yet.
MONEY TRAIL
- Oceanic Edibles International is facing insolvency proceedings as it has defaulted over hundreds of crore.
- IOB-led consortium of five banks has removed the RP — CA V Vankata Sivakumar — during the Committee of Creditors meeting held on February 9
- Resolution Professional (RP) wanted a forensic audit of defaulter company
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