Govt's Dighi Ports U-turn latest blow to insolvency
Not only does JNPT stand to lose Rs 20 crore but its withdrawal may open the doors for the Adani Group.
Not only does JNPT stand to lose Rs 20 crore but its withdrawal may open the doors for the Adani Group to take over the port that was developed by Vijay Kalantri, who has now been declared a wilful defaulter. The other option for the committee of creditors (CoC) is to opt for liquidation of the port, which is located 150 km from JNPT.
Bankers said, the government's surprise U-turn on JNPT's bid also sends a wrong signal to international investors, some of whom have been criticised for not honouring their commitment during the insolvency resolution process. In fact, the ministry of corporate affairs was looking to levy stiff penalties against companies such as Liberty House that failed to pay up after emerging as the top bidder.
But it is the complete change of heart in the government in recent months that has stumped bankers after the shipping and finance ministries went out of the way last November to enable JNPT to submit a bid for Dighi Ports.
The CoC had found two bids of JNPT and Adani Group valid and asked them to increase the bid amount, if they wished to. In fact, the required government clearances were hurriedly received and the CoC too backed JNPT’s bid, despite Adani’s offer to raise its offer. While JNPT had offered Rs 611crore and did not improve its offer, sources said, Adani Group revised its bid to make it Rs 1 crore higher than JNPT’s offer.
Sources said the JNPT was asked to pay the bank guarantee of Rs 100 crore, which it did not give nor sought exemption from CoC.
JNPT has accumulated profit of about Rs 4,000 crore.