Hyderabad: The National Company Law Tribunal (NCLT) stripped Telangana of ‘creditor’ status and declared it as a ‘related party’ in a case pertaining to AP gems and jewellery park, which was launched as a public-private venture in 2001.
The state handed over Rs 100 crore worth land on Road No. 10, Banjara Hills, to the proposed gems park, which never came into being in the last two decades. The Telangana State Trade Promotion Corporation Ltd (TSTPC) had facilitated the land for the proposed park with Suresh Chukkapalli of Hyderabad-based Phoenix Group as its promoter.
A tribunal bench comprising K Anantha Padmanabha Swamy, member (judicial), and Veera Brahma Rao Arekapudi, member (technical), said the Telangana State Trade Promotion Corporation cannot be treated as a creditor. The tribunal also directed the resolution professional (RP) to reconstitute the committee of creditors (CoC) afresh.
The counsel, who argued the case of Telangana State Trade Promotion Corporation, told STOI that since the tribunal has now ordered reconstitution of the CoC, they will oppose inclusion of Phoenix in the creditors’ list at the time of convening the meeting of creditors by the RP. “Phoenix Group too should be treated as a related party and not as a creditor. This is going to be our stand before the RP,” he stressed.
The TRTPC is now struggling to get back the land and the money. The private partner got 89% of the project, while the state got 11% stake.
Though the private partner firm was supposed to invest Rs 12 crore initially towards partial cost of the land, it invested only Rs 6 crore. The balance amount was treated as a loan from the TSTPC.
Suresh, who is Phoenix chairman, is also director of Gitanjali Group, which is owned by Mehul Chinubhai Choksi. In a sudden turn of events, however, Choksi’s Gitanjali Group bought AP gems and jewellery park and became its sole owner. But on account of surfacing of a bank fraud involving Choksi, the Enforcement Directorate attached the gems park, which was later upheld by the National Company Law Tribunal.
Choksi, who is absconding, is accused of duping Punjab National Bank to the tune of Rs 6,500 crore and is facing charges under IPC sections of criminal conspiracy, criminal breach of trust, cheating and dishonesty and money laundering.
Earlier Phoenix, which lent Rs 9 crore to the gems park entity, got it declared as insolvent and the RP, KV Srinivas, is trying to find out a resolution on the issue.
He had included the TSTPC as creditor and gave it 65% of voting rights in the CoC. As Phoenix was the sole creditor in the CoC till then and was enjoying 100% voting rights, it felt aggrieved by the decision of the RP and challenged his decision before the National Company Law Tribunal.