Mumbai/New Delhi, Feb 1 (IANS) As all revival options appeared to fail, and after a crucial hearing in the National Company Law Appellate Tribunal (NCLAT) on Friday, the debt-hit fashion major Reid & Taylor may face liquidation, officials said.
At today’s hearing before the NCLAT, the appellant, Finquest Financial Solutions (FFS) had challenged the NCLT Mumbai’s earlier order asking a Gujarat-based company to participate in the Reid & Taylor’s resolution process, although the statutory 270-day period ended on January 1.
After the Gujarat-based company CFM Asset Reconstruction Pvt. Ltd. (CFMARPL) backed out at the last minute on January 31, the NCLT Mumbai had allowed a New Delhi-based company Indian Gas Ltd. to participate in the Resolution Process.
The NCLAT had issued notices to all parties concerned and kept the matter for hearing today.
Interestingly, the IGL, which was directed by NCLT Mumbai to remain present at the NCLAT hearing today and prove its bonafides by Feb. 5, also failed to turn up, said FFS lawyer Sunil Fernandes.
The NCLAT, frowning at the delays, said in view of the statutory mandate and orders of the Supreme Court, on the issue of 270 days available under Corporate Insolvency Resolution Process, the NCLT Mumbai must complete its proceedings in the matter within two weeks.
The NCLAT also noted the FFS’s senior advocate and ex-law minister Ashwani Kumar’s submissions that “no entity can approach the NCLT for the first time after the expiry of the 270-day period.”
These developments, coupled with several entities backing out or declared ineligible, have effectively ruled out the possibility of revival of the beleaguered Reid & Taylor, sitting on a pile of around Rs 8,000 crore debt, Fernandes pointed out.
“For long, there has been neither a viable resolution plan nor a resolution applicant, and it is difficult that this could be achieved within the next fortnight. The sole course left open for the NCLT Mumbai could be to order Reid & Taylor’s liquidation, within the two weeks granted to it,” Fernandes told IANS.
The NCLAT has listed the matter on the board for the next hearing on Feb 27.
Officials in the FFS – the biggest investor in Reid & Taylor – say that the fate of the around 1,100 employees of the Mysore-based company would be clear only after the NCLT Mumbai’s final verdict.
Promoted by S. Kumars-fame textile tycoon, Nitin S. Kasliwal, Reid & Taylor once boasted of top-notch brand ambassadors such as Hollywood’s Pierce Brosnan and Bollywood’s Amitabh Bachchan.
Since 1999, the company operated a modern plant and machinery in Mysore from where it produced its famous men’s apparels ranging from formal to casuals, but after the financial crisis hit a few years ago, it continued with truncated operations.