The National Company Law Tribunal (NCLT) has rejected the appointment of Vijaykumar V Iyer of consultants Deloitte as an interim resolution professional (IRP) to resolve the Rs 44,000-crore Lanco Infratech default, putting an end to big firms taking up multiple assignments that they cannot do justice to.
An individual who is already an IRP for two other companies will not be able to find sufficient time to act as IRP for Lanco, which is already a complicated case, the Hyderabad bench of the NCLT said. The case has to be dealt with in a time bound manner hence it may not be possible if an individual takes up more cases, it said.
The court has appointed Savan Godiawala as IRP based on the recommendation made by IDBI Bank which has initiated the bankruptcy proceedings.
This ruling could become a benchmark for those bidding to be resolution professionals in multiple cases. Since the process is new, the big four accounting firms such as EY, KPMG, PwC and Deloitte have been getting mandates to handle many big cases. The lack of infrastructure elsewhere and experience makes them an easy choice for banks too which are also new to the system.
The counsel for Lanco Infratech objected to appointment on grounds that just last week, Iyer was appointed as IRP for Binani Cement as well as Bhushan Steel – which have a combined loan of Rs 50,000 crore. Lanco is among the 12 cases directed by Reserve Bank of India to be referred to bankruptcy court for speedy resolution. So far, in all large cases, banks have appointed large consulting firms like EY.
