Published On : Mon, May 25th, 2015

IDBI Bank to auction Manoj Jayaswal’s 10-seater aircraft for Rs 12,000 cr loan default

Nagpur: IDBI Bank is auctioning a 10-seater Bombardier aircraft, which once held the pride of place in Nagpur’s industrialist Manoj Jayaswal’s empire, on Tuesday.

The Jayaswal-promoted Abhijeet group has run up a combined NPA burden of close to Rs 12,000 crore, and IDBI Bank is one of the lenders to the group.

The sale would come at a great cost to the banker as the reserve price for the 2010-make Bombardier Challenger 605 aircraft has been fixed at Rs 57 crore, against a reported acquisition cost of more than Rs 100 crore.

A young age of the aircraft – it’s just five years old – plus a reserve price of Rs 57 crore means it won’t turn up as scrap like what happened to Mallya’s 30-year-old jet recently sold off for just Rs 22 lakh.

The sale would be a smooth affair at half the price for a jet that once ferried the country’s high and mighty. There is, however, a glitch.

One of Abhijeet’s creditors, the Kolkata-based Paharpur Cooling Towers, has raised objection to the sale of the aircraft stationed at Nagpur airport, claiming the sale is illegal.

“Such sale of the aircraft pursuant to the Request for Proposal issued by IDBI Bank is illegal and in violation of the order dated March 31, passed by Hon’ble High Court of Calcutta and anyone participating in the said e-auction shall do so at his risk, peril and costs,” Paharpur said via its law firm R N Ghosh and Associates.

The Calcutta High Court, on March 31, restrained Abhijeet Projects from making any change in its management and dealing with or alienating its properties and other assets without leave of the court.

The ruling can potentially frustrate asset sale by other banks and financial institutions as well.

IDBI Bank said that it has restructured its loan to Abhijeet and in terms of the restructuring package, the company was required to execute an irrevocable power?of?attorney in favour of the bank to enable it to sell the aircraft and utilise the proceeds towards adjustment against a part of the outstanding dues.

Once seen as a rising star in the private sector power space, Abhijeet’s misfortune began when it was named in the coal scam with several First Information Reports being filed by the Central Bureau of Investigation against the group.