Patanjali says Adani Wilmar not eligible to bid for bankrupt Ruchi Soya
Baba Ramdev-led Patanjali Ayurved has raised questions over the eligibility of Adani Wlimar to participate in the bidding process to acquire bankrupt Ruchi Soya. According to sources, the resolution professional dealing with the case has sought at least 8-10 days time for replying to clarifications sought by Patanjali Ayurved related to the eligibility of Adani Group company.
Adani Wilmar, which sells cooking oil under the Fortune brand, and Baba Ramdev's Patanjali group have locked horns in the fight to acquire debt-ridden Ruchi Soya.
The resolution professional is reported to have informed the Committee of Creditors (CoC) that it will take 8-10 days to reply to Patanjali, which has raised questions over the Adani group's eligibility to participate in the bidding process under Section 29 A of the Insolvency and Bankruptcy Code.
Section 29A states the bidders for an insolvent company cannot be allowed to offer a resolution plan if the bidding company is 'connected' to another stressed-loan corporate.
It has been alleged that Pranav Adani, MD of Adani Wilmar and a relative of Adani Group chief Gautam Adani, is married into the Kothari family, the erstwhile promoter of Rotomac group which is undergoing investigation after Bank of Baroda lodged a complaint against the company for siphoning off loans over Rs 3,000 crore.
According to the recent IBC ordinance, approved by the President on June 6, the definition of "connected person" has broadened to include "related party" and "relatives" a category that is expected to include in-laws.
Patanjali, which has been declared as the second highest bidder with Rs 5,700 crore offer, was asked to submit a revised bid by June 16 to match or better the highest offer of Rs 6,000 crore by Adani Wilmar under the Swiss Challenge system adopted by the RP and banks. However, Patanjali wrote to the RP seeking clarifications instead of submitting fresh and revised bid.
Under the Swiss Challenge method, Adani will get another chance to make an offer if Patanjali were to match or better its offer of about Rs 6,000 crore. Yoga guru Ramdev-led Patanjali group has also questioned the appointment of Cyril Amarchand Mangaldas as the RP's legal advisor as the law firm was already advising the Adani Group.
The Haridwar-based FMCG firm has raised the issue of conflict of interest over the appointment of the law firm due to its alleged connection with the Adani group.
Ruchi Soya, which is facing the insolvency proceedings, 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 the RP. The appointment was made by the National Company Law Tribunal on the application of the creditors Standard Chartered Bank and DBS Bank, under the Insolvency and Bankruptcy Code.