SBI is now trying to sell KS Oils's oil refinery plants at West Bengal, MP and Rajasthan for about Rs 611 crore after a failed attempt a year back.
Lenders' efforts to recover about Rs 4,000 crore from troubled edible oil producer KS Oils is faltering.
While consortium lender State Bank of India (SBI) has decided to revive an earlier failed effort to sell off five plants, another lender Srei Infrastructure Finance has suffered a setback in bringing in criminal proceedings against the company and its officials.
SBI is now trying to sell KS Oils's oil refinery plants at West Bengal, MP and Rajasthan for about Rs 611 crore after a failed attempt a year back.
Smarting under the previous failed attempt in January 2015 when the auction failed to evoke any response, SBI has now decided to sell the plants located at Haldia in West Bengal, Kota in Rajasthan and Morena, Guna and Ratlam in Madhya Pradesh individually if there is not enough response to all the five assets together, SBICap Trustee Co has informed the prospective bidders.
Failure to recover outstanding even two years after acquiring the assets by invoking the Sarfaesi Act (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) in March 2014 points towards an inherent flaw in the way the banking sector are tackling the NPA issue.
Even as SBI hopes to become second-time lucky with the asset sale, another lender Srei Infrastructure Finance has suffered a setback in slapping charges of cheating under Section 420 of the Indian Penal code.
"The transaction between the petitioner company and the complainant is mere breach of contract... I have no hesitation to hold that the complainant company has failed to make out a case to prosecute the petitioner company for an offence punishable under Section 420 of the Indian Penal Code," Judge Ranjit Kumar Bag has said in his judgement last month.
Srei claimed that criminal proceeding be initiated against KS Oils and its officials for its alleged intention to deceive the lender from the very inception of the transaction.
Srei had extended a loan of Rs 100 crore for KS Oils's plants at Guna, Ratlam and Kota by creating a charge on 92 wind turbines of the company with a capacity of 78 mw.
Srei, however, alleged that KS Oils officials subsequently had fraudulently removed the security clause from the loan document, a charge which couldn't be proved by the company.
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