Business of Corporate Debtor:
Selling Holiday membership products. There were mainly two categories of products
Non Refundable membership product.
Refundable membership Product.
Most of the employees of corporate debtors had left the organization before RP took charge.
Also funds were not available to carry out day to day activities of the corporate debtors.
Mr. Jain appointed a CA Firm to understand the business process and to carry out verification of cash & bank transaction of Corporate Debtors.
As per report it was observed that, the funds collected by Corporate Debtors were invested/diverted to various group companies to the tune of Rs.3500 Crores (as per the valuation given by ex-management)
Only operational creditors in the company and not a single financial creditor.
Operational creditors were mainly the small investors. There were lacks of such small investors.
Difficult to constitute committee of creditors - even going by the rule to select 18 top operational creditors - would also not give proper representation to such mass of investors. Yet, formed committee of creditors (COC).
However, the small investors were not aware of such the then new law of & took Mr. Jain as new owner of the company and expected payment from him. Everyday there was chaos at the office.
However, some impish elements played illegal role and instigated some investors who abducted me from the outer space of the office of the corporate debtor in one evening of September 2017. Since they were not professional criminals and due to assistance of Mumbai Police, I was relieved safely within 24 hours.
Mr. Jain filed an application with Hon’ble NCLT court for the attachment of Properties of Corporate Debtors and its Associate / Sister concerns and requested Hon’ble NCLT court to prohibit all the directors to leave this country, Hon’ble NCLT court passed an order directing not to alienate or encumbered any property and thereby to protect the interest of a large number of investors and also directed all the four directors to deposit their passport with the registry of court
Claim amounting to Rs. 4900 Cores were submitted by around 35 Lakh investors.
On 10th May 2018, after hearing and considering submissions of Citrus Welfare Society, SEBI, Insolvency Resolution Professional, Hon’ble Supreme Court passed extensive directions with regards to forensic investigation of the RTSCPL, CCIL and also their associate/sister concerns and appointed Deloitte to do carry out forensic audit of RTSCPL, CCIL & It’s Associate/Sister concerns.
Under the said direction, Hon’ble Supreme Court also attached all the properties of RTSCPL, CCIL, and their sister concerns. The court directed that:
Hon’ble Supreme Court has set up a Sales cum Monitoring Committee of four members. The committee comprises me i.e. IRP, one SEBI Representative, one Investor Representative & one representative of RTSCPL, CCIL & its Associate/Sister Concerns.
This four-member committee will then appoint a registered valuer to value the properties of RTSCPL, CCIL & its Associate/Sister Concerns,
On completion of valuation, the sale of these properties will take place under the aegis of NCLT.
While discharging the duties as per the above directions of the Supreme Court, RP was facing a tremendous financial crunch.
I systematically defined the core working responsibilities, which are mainly as follows.
Claims of Investors.
Providing data to Deloitte for conducting Forensic Audits.
To secure Assets / Properties and their Valuation.
To attend litigations.
To sell the properties
Since this matter involved the interest of more than 35 Lakh Investors, I have to be very alert & responsive. I have to perform multi-tasking efforts to protect the interest of investors.
The total number of documents concerning the aforesaid investments made by 35 lakh investors runs into more than 50 lakh pages.
Other Challenges
The auditor appointed by Hon’ble Supreme Court /Providing data to Deloitte for conducting Forensic Audit.
Actions were taken to secure Assets / Properties and their Valuation.
To attend litigations.
To sell the properties