In a development that could further complicate the resolution plan for debt-ridden Ruchi Soya, Ramdev-promoted Patanjali Ayurved has questioned the eligibility of rival bidder Adani Wilmar under the provisions of the Insolvency and Bankruptcy Code (IBC).
In a strongly worded letter to the committee of creditors (CoC), Patanjali has alleged serious conflict of interest with respect to the legal adviser of Adani Wilmar — Cyril Amarchand Mangaldas — and has sought details from the CoC before it goes ahead with the process to finalise successful resolution applicant for Ruchi Soya.
“There are issues pertaining to serious conflict of interest with respect to the legal adviser engaged by Adani Wilmar. The same entity is giving legal advice to both Adani and the resolution professional conducting bidding for Ruchi Soya. We have written to the CoC expressing our surprise and have asked for details,” Patanjali spokesperson SK Tijarawala told Financial Chronicle.
Cyril Amarchand Mangaldas acted as legal adviser to Adani Wilmar while also extending its legal support to the resolution professional (RP) appointed. Though Cyril Amarchand Mangaldas has now resigned as legal advisor to Adani Wilmar, Patanjali sees a serious conflict of interest here. Sources said Patanjali wants the other bidder to be disqualified under the provisions of Section 29A of IBC that prohibits participation of related parties in a resolution process.
Cyril Amarchand Mangaldas and Adani Wilmar could not be reached for comments.
The fresh development came on a day when the CoC opened the fresh bids from the two bidders -– Adani Wilmar and Patanjali. Both companies had submitted their revised bids to acquire to bankruptcy-hit firm Ruchi Soya on Monday.
The lenders of the edible oil firm had decided to hold a fresh round of resolution process to maximise asset value. In fact, it decided to go for Swiss challenge method to get higher bids. Under this method, lower bidders are given chance to match the highest bidder and if matched then the highest bidder is asked to improve its bid.
Sources said that Gautam Adani group company Adani Wilmar has offered about Rs 6,000 crore in its revised bid for Ruchi Soya, overtaking Patanjali’s bid of around Rs 5,700 crore. Patanjali spokesperson, however, did not disclose the bid value but raised questions about Adani’s bid.
Under the Swiss challenge method, if bidding continues from here on, Patanjali will have the right to match the highest offer. If there is no further increase in bid amount thereafter, it could be selected as the successful resolution applicant for Ruchi Soya.
It is worth noting that Patanjali Ayurved already has a tie-up with the Indore-based Ruchi Soya for edible oil refining and packaging and it wants to further expand into cooking oil business. Thus, it remains immensely interested in the company. It also emerged as the highest bidder in the earlier round.
Apart from Patanjali and Adani, companies that have shown interest in acquiring Ruchi Soya were Wilmar, Emami Agrotech and Godrej Agrovet. But only two have decided to place revised bids.
Ruchi Soya has a total debt of about Rs 12,000 crore. The company has many manufacturing plants and its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.
In December 2017, Ruchi Soya Industries entered into the Corporate Insolvency Resolution Process (CIRP) and Shailendra Ajmera was appointed as interim resolution professional (IRP).
The appointment was made by NCLT on the application of the creditors Standard Chartered Bank and DBS Bank.
The company is part of the so-called second list of 28 defaulters the Reserve Bank of India has named for resolution under its schemes before December 2017, failing which cases would have had to be filed against these firms at NCLT.