NCLT approves resolution plan for Divya Jyoti

The National Tribunal Company Law has approved a resolution plan for BSE-listed Divya Jyoti Sponge, marking a revival of the sick company whose management was accused of embezzling funds.

This would be one of the few cases where a small and medium enterprise is revived - with no job losses - within 180 days, the initial deadline for insolvency proceedings.

“The resolution plan submitted by CP Ispat…is to be approved,” said Jinan K R, member judge at Kolkata NCLT.


The committee of creditors, including Assets Reconstruction Company, Punjab National Bank, UCO Bank and West Bengal Financial Corporation, had earlier approved the plan. The total debt was about Rs 75 crore.

As per the resolution plan, CP Ispat would bring in about Rs 45 crore upfront and the rest Rs 30 crore, including penal charges, have been extinguished, said an executive involved in the processes.

Arun Kumar Gupta, the resolution professional, declined to divulge the details of the plan.

The company obtained about five-six bids of which two, including CP and Pearls Dealers were submitted for consideration. The committee of creditors approved the CP Ispat plan with 100% voting share while rejecting the plan submitted by Pearls.

Interestingly, Sunil Jain, the promoter of the company, submitted a resolution plan. But in February, the lenders rejected it citing the new ordinance barring promoters to bid for their own company subject to some provisions.

Earlier, E&Y conducted a forensic audit that unearthed alleged embezzlements.

“The revival of the company has marked a new chapter in the state’s industrialisation efforts,” said Gupta.