Lenders reject Gautam Thapar’s bid to reclaim Jhabua Power

Gautam Thapar’s bid to reclaim Jhabua Power, a thermal power company formerly owned by his family firm Avantha Group, has been rejected by lenders citing investigations by government agencies, according to court documents and sources.
This contrasts with their position with respect to a bid by C Sivasankaran for his company Siva Industries and Holding. The lenders accepted Sivasankaran’s bid in April despite his companies being under the scanner of the Central Bureau of Investigation.

According to a June 2 order of the National Company Law Tribunal (NCLT), the lenders took note of government probes as a disqualification criterion for Thapar’s bid in creditor meetings.

“Some of the members of the Committee of Creditors also noted that some other accounts held by the Promoters are under examination by various Government authorities/Commissions. Hence, the Committee of Creditors found the proposal of the Promoters unacceptable and unanimously decided not to pursue that proposal further,” the NCLT said in its order.

Thapar had made a bid for Jhabua Power Ltd – which went into bankruptcy on March 27, 2019 - through Avantha Holding Ltd.

He is pitted against Adani and state-owned power generator NTPC, both of which have made offers to acquire the company.

Thapar has been under the scanner of government agencies such as the Serious Fraud Investigation Office over dealings between group company CG Power and Industrial Solutions and other companies of the group.

He was removed from the board of CG Power and Industrial Solutions amid allegations of fund diversion.

The reasons cited by lenders for disqualifying Thapar’s bid do not, however, match their rationale in a similar case involving the account of former Aircel founder C Sivasankaran.

Lenders’ approved Sivasankaran’s bid for one of his companies despite CBI probing alleged irregularities in loans he had raised from IDBI Bank.

State Bank of India and Life Insurance Corporation of India, which are among the creditors of Jhabua Power that have rejected Thapar’s offer, were also part of the committee of creditors of Siva Industries and Holding that approved Sivasankaran’s bid.

Queries emailed to Avantha Holding, Jhabua Power’s resolution professional Abhilash Lal, SBI and LIC remained unanswered until press-time on Tuesday.

Jhabua Power has outstanding loans of around Rs 6,000 crore to be paid to various banks and financial institutions.

In the case of Siva Industries and Holding, the creditors have outstanding dues of Rs 5,000 crore. They approved a Rs 500 crore offer from Sivasankaran to scrap bankruptcy proceedings against his company, ET reported on May 12.

Though bankruptcy regulations expressly forbid promoters from bidding for their own companies, a section of the law dealing with withdrawal of bankruptcy proceedings against a company gives creditors the right to restore companies back to their original promoters, provided 90% of them agree to do so.

Jhabua Power is a power generation company based in Seoni district of Madhya Pradesh.

The company currently has fully operational thermal capacity of 600MW, while 660 MW is under implementation. It went into financial trouble because of the indebtedness of other Thapar group companies.