Hyderabad: The Andhra Pradesh High Court on Monday admitted a petition filed by Wardha Power Company Limited (WPCL), a subsidary of Hyderabad-based KSK Energy, seeking to an order to wind-up IL&FS Engineering and Construction Company Ltd as it had defaulted on repaying the money it owed to the former.
In the petition, WPCL has submitted that “IL&FS Engineering and Construction Company, formerly Maytas Infra, owed Rs 50 crores to it. Though initially the liability was accepted, subsequently it was denied after the change in the management.”
Justice B. Seshasayana Reddy pointed out that “such ability to pay debt was no defence enough to admit a petition for winding up when the amount was due but not paid after receipt of a statutory notice.”
WPCL is a special purpose vehicle (SPV) for coal power plants promoted by KSK Electricity Financing India Private Limited, which is a wholly-owned subsidiary of Hyderabad-based power producer KSK Energy Ventures Ltd.
KSK Energy was one of the companies, which removed Maytas from their projects and forfeited its bank guarantees after its founder Ramalinga Raju admitted to a massive accounting fraud in Satyam Computers in 2009. The winding up petition was filed in November 2010.
Wardha had also sought a postponement of a meeting of unsecured creditors convened by IL&FS ECC in December 2011 under the directions of the AP High Court. The meeting was convened to consider IL&FS’ proposal to write off accumulated losses by way of reducing share capital, so as to allow the company to pay dividend.
According to another petition (CP 240 of 2011), IL&FS ECC had admitted a liability of Rs 1.21 crore towards Wardha as against Rs 70.02 crore claimed by the latter.
Justice Ramesh Ranganathan of the Andhra Pradesh High Court, however, allowed IL&FS ECC’s proposal in October 2012 after ordering the Hyderabad-based construction company to set aside the disputed amount of Rs 68 crore under a special reserve.