The promoters were to use the funds raised from the Sterling and Wilson IPO to repay the loan to the company by November 18.
On November 15, promoters sought more time from the company’s board to repay loans worth Rs 2,341 crore citing unforeseen reasons, including a liquidity crisis. The announcement sparked outrage among institutional investors, sending the stock tanking by 20%.
Old Bridge Capital’s alternate investment fund was one of the investors in Sterling and Wilson IPO. The company got listed on August 20, 2019. While one of the objectives of the 2,850-crore IPO was to enable the promoters to repay loans amounting to Rs 2,563 crore within 90 days of IPO, the company received Rs 1,000 crore on December 31, 2019.
“We believe, based on the disclosures in the RHP, it clearly demonstrates that the board of directors and the audit committee had no locus standi in extending the timelines of repayment,” the letter said. ET has a copy of the letter. Promoters of Sterling and Wilson still owe the company Rs 1,644 crore for which they have sought a phased repayment schedule.
When contacted, the company spokesperson denied there was any concealment of material information in the prospectus.
“We deny that there is any breach by promoters in facilitating the repayment of the loans to company. It is within the legal framework to grant such permission by the board of directors of the company,” he added. Old Bridge Capital Management said the amount of Rs 2,850 crore received from proceeds of sale should not have been used for any other purpose.
The letter also said that there was no reference in prospectus with respect to extension of timelines and change in repayment schedule in case the collections from the offer of sale is lower.
While accusing non-disclosure of information and suppressing of the facts in the RHP by all parties involved in offer for sale including the company, promoters and merchant bankers, the fund asked Sebi to act against them.
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