United Seamless moves Insolvency Board alleging malpractice by resolution professional

HYDERABAD: Debt-ridden Indo-Malaysian venture United Seamless Tubular has moved the Insolvency and Bankruptcy Board of India (IBBI) alleging malpractice by the resolution professional (RP).

This is the second such complaint received against the National Company Law Tribunal-appointed official in the debt resolution process. United Seamless Tubular, which was referred to the bankruptcy court last year for loan default, has accused the RP of colluding with a bidder and favouring it by undervaluing the company’s assets.

Hyderabad-based Kamineni Group owns 60% stake in United Seamless, which manufactures seamless pipes, while Malaysia’s UMW Group holds the remaining stake in the joint venture.


In a letter to the chairman of IBBI dated April 26, United Seamless accused the RP — V Venkatachalam — of “partial and favourable treatment to a specific investor — i.e., Maharashtra Seamless (MSL) — of his choice”. It alleged that the RP conveyed to the investor the “value of the assets/liquidation value and other important aspects” in advance to facilitate the bidder submit its bid accordingly.

There was “no transparency and fair play in the entire CIRP (corporate insolvency resolution process) process, and as such it has affected all the stakeholders involved”, it said, adding that several of the alleged irregularities by the RP were brought to the notice of the NCLT for redressal. Last week, Indian Bank, a lender to United Seamless, had moved the NCLT’s Hyderabad bench accusing the RP of colluding with audit firm Brahmayya & Co to help DP Jindal Group company Maharashtra Seamless (MSL) acquire the Indo-Malaysian venture. The RP had declined to comment when ET contacted him following Indian Bank’s allegations.

The company has also alleged that its assets were “drastically undervalued” to arrive at a liquidation value.