The National Company Law Tribunal (NCLT) has granted PC Jeweller and State Bank of India (SBI) an additional 20 days to resolve the matter concerning a default on a loan payment of ₹1,180.2 crore by PC Jeweller. The NCLT adjourned the case until 29 January after considering the ongoing settlement talks.
SBI initiated insolvency proceedings in June 2023 against PC Jeweller for the default and, besides NCLT, the bank has approached the Debt Recovery Appellate Tribunal to expedite the recovery process.
PC Jeweller has a total outstanding debt of ₹3,278 crore to various banks, with SBI being the largest creditor. Other creditors include Union Bank of India ( ₹530 crore), Punjab National Bank ( ₹478 crore), and Indian Bank ( ₹226 crore).
In a previous hearing, PC Jeweller proposed paying a significant portion of the outstanding dues to banks with an added interest of 8.5% for the next three years, totalling ₹2,200 crore. The company also suggested an upfront payment of ₹340 crore.
The company’s counsel informed the tribunal that they have now decided to double the upfront amount as a public-listed company, seeking a swift resolution to the case. The payment term has also been reduced from five years to three years as part of the company’s effort to expedite the resolution process.
Last November, in its pursuit of recovering the outstanding loan payment, SBI took possession of two residential properties owned by PC Jeweller in New Delhi.
Apart from dealing with creditors, PC Jeweller is under scrutiny from the Securities and Exchange Board of India (Sebi). In January 2018, Sebi raised concerns about insider trading involving PC Jeweller’s founder P.C. Gupta, his brother Balram Garg, and their children.
In May 2021, Sebi’s investigation concluded that Gupta and Garg were indeed involved in insider trading, resulting in a ₹1 crore fine and a one-year trading ban. However, the Supreme Court overturned both the Securities Appellate Tribunal (SAT) and Sebi orders in April 2022.
PC Jeweller was founded by brothers P.C. Gupta, Amar Chand Garg and Balram Garg.
In 2011, the family of Amar Chand Garg reduced its stake to 0.7%, and in 2015, a family dispute led to P.C. Gupta’s son Sachin Gupta and daughter-in-law Shivani Gupta breaking away from the business. They received 16 million shares of PC Jeweller as part of a settlement.
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Published: 09 Jan 2024, 08:25 PM IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
