September 28, 2021

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MCA moves NCLT to freeze all assets of Metalyst Forgings former promoters

The Ministry of Corporate Affairs (MCA) has approached the Mumbai bench of the National Company Law Tribunal (NCLT) against Arvind Dham and other former directors of Metalyst Forgings, a listed subsidiary of Amtek Auto.

The government, under the Companies Act, is seeking an order from the tribunal to attach assets and disgorge money from the erstwhile promoters of the Metalyst Forgings including Dham, chief financial officer Arun Kumar Maiti and Sanjiv Bhasin, among others.

According to the ministry, an independent audit had pointed out allegedly questionable financial transactions of Rs 3,454 crore by the erstwhile management.

The MCA is also seeking an order to restrain all erstwhile promoters from selling or creating any third-party rights on their personal assets and direct them to disclose all movable and immovable assets.

Under Section 241 of the Companies Act, if the central government is of the opinion that the affairs of a company were being conducted in a manner prejudicial to the public interest, it could approach the NCLT to seek relief.

On Wednesday, a division bench of Bhaskara Pantula Mohan and Narender Kumar Bhola directed all the respondents to file their response to the case and adjourned the matter to September 29.

Ashish Pyasi, who is appearing for Dham and others in the case along with Alok Dhir, managing partner of law firm Dhir & Dhir Associates, refused to divulge any details saying that the matter was sub judice.

In December 2017, the company was admitted under the Corporate Insolvency Resolution Process in a petition filed by the State

. Dinkar T Venkatasubramaniam was then appointed as the interim resolution professional of the company.

“The respondent company (Metalyst Forgings) has transferred credit balance to capital works in progress, given loans and credits to potentially related companies, manipulated the books and executed other fraudulent transactions with related parties at the cost of stakeholders in connivance with Rs no 2 (Dham) to 14,” the MCA said in its petition.

BSE-listed Metalyst Forgings is part of one of the largest integrated component makers in the country, Amtek Group.

Lenders to the group have approved a revival plan submitted by US-based hedge fund Deccan Value Investors for about Rs 2,700 crore. The Amtek Group owes more than Rs 13,000 crore to lenders and was among the 12 debt-laden companies initially taken to the NCLT as per Reserve Bank of India’s direction in 2017.

On September 1, the tribunal had allowed a similar petition of MCA against Videocon Group’s promoter, Venugopal Dhoot, and his relatives.

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