Mumbai Bench of the National Company Law Tribunal (NCLT) dismissed the plea of RTIL’s resolution professional to declare a business transaction of ₹1019.48 crore as ‘fraudulent’.
NS rp The company’s Venkatesan Sankaranarayanan, through lawyers, argued in the tribunal that they relied on a forensic audit report that exposed certain transactions as potentially fraudulent.
The RP argued, “The asset base of the corporate debtor was reduced due to write-off of the corporate debtors by the debtors amounting to ₹1,019.48 crore as on March 2016.” “There was an increase in the purchase of raw materials during the years 2013 and 2014 and subsequently by March 31, 2016, the value of inventory was reduced by ₹551.74 crore by heavily discounting it.”
“The Bench observed that it is a fact that the Management has taken a definite decision which is not acting as intended by the Management and has ultimately resulted in loss,” said the Tribunal before the Members, H.V. Subba Rao And CB Singh, in its order dated 29 November. “However, such poor commercial business decisions cannot be considered fraud or wrongful trading under the provisions of section 66 of the IBC.”