The Jaypee Group has said that there was no wrongdoing or irregularity in creating a charge on the “unencumbered land” by Jaypee Infratech in favour of Jaiprakash Associates (JAL), the parent company. The company said it was “fully committed” to deliver flats to home buyers.
“JAL had been providing support to JIL as a holding company and only a charge was created on the Jaypee Infratech land in favour of JAL’s lenders, which included lenders of Jaypee Infratech as well. Besides, all transactions are as per the provisions contained under the applicable statute,” Jaypee Group Executive Chairman and CEO Manoj Gaur said.
Last week, the insolvency resolution professional appointed for Jaypee Infratech had moved the National Company Law Tribunal alleging irregularities in the mortgage of an 858-acre land to secure bank loans of Jaypee Associates. The two companies have several common lenders, including IDBI Bank, ICICI Bank and State Bank of India.
Gaur said the transactions were transparently done at the behest of banks with valuation undertaken by valuers appointed by banks and added that they were done “in normal course with bona fide intention”.
Before IDBI Bank moved NCLT at the behest of RBI, the Jaypee Group had proposed to square off Jaypee Infratech’s loans by setting aside land parcels at valuations arrived at banks to avoid any hardship to home buyers, a company executive said. “The move did not entail any haircut for the lenders,” the executive added.
While Jaypee Infratech had filed a petition against IDBI’s move to initiate insolvency proceedings, the company withdrew it “in the interest of home buyers and fixed-deposit holders” on the assurance of early approval of a resolution plan, which was being considered by lenders at that time, the executive said.
On his part, Gaur said, the group was keen to ensure that home buyers got their flats. “JAL is fully committed to deliver homes to home buyers. In fact, even during the pendency of insolvency proceedings of Jaypee Infratech, JAL as a contractor, continues the construction of homes and has offered possession of over 1,500 homes between August 2017 and January 2018,” he said, adding that Jaypee Infratech had already given a detailed schedule under RERA for completion of homes and over 4,000 units would be offered for possession by March 2018.
“The group is best suited to meet expectation of home buyers and we consider it to be a sacred responsibility,” Gaur said. JAL is one of the companies in the fray for completing construction work as part of the resolution plan although an amendment to the Insolvency and Bankruptcy Code makes it tough for the promoter to bid for a stressed asset.
“The main reason for the liquidity crunch in JIL was the downtrend in the real estate sector, otherwise selling land would have been the first option for the group, instead of selling plants, which were revenue generating and this aspect cannot be brushed aside,” he said, adding that the group had got out of several businesses to repay debt to lenders.