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NEW DELHI: In a rare decision, National Company Law Tribunal (NCLT) on Feb 3 withdrew its corporate resolution order awarding a bankrupt company — Alchemist Ltd, promoted by former Trinamool Congress MP KD Singh — to a company that turned out to be a related group entity. The bench observed the “insolvency proceedings were vitiated by fraud, collusion and malicious intent”.The withdrawal of the corporate resolution order by NCLT, a rare occurrence, happened after Enforcement Directorate approached the Delhi bench with evidence of money laundering by the group and how the promoters had allegedly created a front entity with “proceeds of crime”, making it a financial creditor with 97% voting rights to grab the firm under insolvency proceedings.Singh and his Alchemist group entities are accused of laundering an amount of Rs 1,840 crore collected from small investors, promising them high returns or allotment of plots and villas. Neither were plots or villas allotted, nor were the investors refunded their money. Interestingly, ED’s money laundering probe is based on an FIR filed by investors in Kolkata, West Bengal, the state Singh represented in the Rajya Sabha.Two of Singh’s hospitals in Panchkula — Alchemist Hospital and Ojas Hospital — are among assets worth Rs 490 crore attached by ED over the past few years.After withdrawal of the NCLT order, ED said its investigation had revealed how Alchemist Ltd was dragged to insolvency by Technology Parks Ltd which dominated the committee of creditors (CoC) with 97% voting rights and later turned out to be an entity of Singh’s group. Insolvency was just a facade and was used merely as a “device to reclaim attached assets and invoke immunity under Section 32A of Insolvency and Bankruptcy Code (IBC)”, ED said. The agency further said an ex-employee of Alchemist group, Gaurav Misra, was appointed resolution professional, raising serious concerns regarding the independence and fairness of the entire process.“The dominant CoC members were group entities accused of money laundering and beneficiaries of proceeds of crime, including Technology Parks Ltd (with 97% voting share), Alchemist Township India Ltd (voting share 1.7%) and Alchemist Realty Ltd (voting share 0.6%)”. It was also highlighted that the aforementioned companies have been arraigned as accused in the prosecution complaint (chargesheet) filed by ED in the case.Accepting the submissions of ED, NCLT said, “An insolvency resolution dominated by accused group entities fundamentally erodes the independence and commercial wisdom of the CoC. Permitting such an insolvency would result in legitimisation of proceeds of crime, dilution of PMLA attachments and abuse of insolvency immunity.”
