Taurus Mutual Fund drags Avantha Holdings to NCLT

Taurus Mutual Fund has dragged Avantha Holdings to National Company Law Tribunal ( NCLT) for default by its subsidiary BILT on its commercial paper (CP) amounting to Rs 100 crore issued to the fund house.

The case is listed for hearing by the tribunal in New Delhi, according to NCLT website.

Avantha Holdings is the parent company of BILT.

It was last week that another fund house, IDBI Mutual Fund had moved the Tribunal in Mumbai against Ballarpur Industries Ltd (BILT) for non-payment of maturity proceeds worth Rs 30 crore.

Now, Taurus MF has filed winding up petition against Avantha Holdings at NCLT, New Delhi.

Taurus MF officials could not be reached for comments.

The issue first came to light when four debt funds of Taurus MF, which owns Rs 100 crore of commercial paper issued by BILT, marked down their net asset values (NAV) by 7-12 per cent each after India Ratings and Research (Ind-Ra) downgraded BILT to default status.

Apart from IDBI and Taurus Mutual Funds, other three fund houses which were having their significant exposure in Ballarpur Industries include DHFL Pramerica, Invesco and Reliance Mutual Fund.

However, all these three fund houses have managed to take it off from their books by selling the debt paper.

The debt-oriented schemes of Taurus MF had bought short term commercial paper (CP) issued by Ballarpur Industries. This paper had maturity dates between February 20 and 27, 2017.

On February 20, BILT was unable to honour its maturity obligation. As a result, the schemes of Taurus MF which were holding this paper as a part of their portfolio did not receive the full amount and Taurus MF marked down the valuation of the CPs issued by BILT.

Sources told PTI that Avantha Holdings had issued a Corporate Guarantee for CPs issued by BILT against which Taurus MF has filed for winding up against Avantha Holdings in NCLT at New Delhi.