Banks move to DRT, take control of Varun Industries' assets

MUMBAI: In another setback to Varun Industries, the Debt Recovery Tribunal (DRT) on Monday gave ‘symbolic possession’ of all mortgaged assets, including movable and immovable ones, to a consortium of 10 lenders.

The consortium, led by Indian banks, moved DRT against the stainless steel exporter earlier this month to recover unpaid loans and interest of over rs 2,000 crore after the loan restructuring exercise failed. The consortium consists of Indian Bank, UCO Bank, Central Bank of India, Syndicate Bank, State Bank of India, United Bank of India, Bank of India, Bank of Baroda, IDBI Bank and Allahabad Bank.

The court also restrained Varun Industries from transferring their shareholding, said Nishit Dhruva, managing partner of MDP & Partners. The law firm is representing the bankers’ consortium. The suit has been filed against the company and its directors Kiran Mehta, Kailash Agarwal, Varun Mehta, Raaja Jain and Mahender Tahilramani. The next hearing is slated for December 3.

The company was admitted to the corporate debt restructuring (CDR) cell by the consortium in May 2012. However, the CDR package was not implemented as the company did not comply with certain conditions put forth by the consortium, the bankers allege. Varun Industries reported a net loss of rs 108.7 crore for the quarter ended September. It has diversified into oil & gas business, wind energy and metal mining.

The company could not be reached for comments. Shares of Varun Industries closed down 9.65% at 9.27 a share on Monday on the Bombay Stock Exchange.