MUMBAI: Private equity fund Urban Infrastructure Venture Capital (UIVC), floated by Anand Jain’s Jai Corp with Reliance Industries (RIL) as an anchor investor, has filed a petition in The National Company Law Tribunal (NCLT) against Neelkanth Township & Construction and its promoter Bhavik Bhimjyani.
The petition has accused the Mumbai-based builder of misappropriation of funds, creation of fraudulent accounts, mismanagement of the company and defaulting on loans and commitments in its Alibaug residential township project. However, Bhimjyani denies these allegations. He said that the fund didn’t bring in Rs.200-crore capital that was committed, leading to the project‘s delay. “Right from the date of investment in Neelkanth in 2007, UIVC has had its nominees on the Neelkanth board and has been aware of the activities, decisions and transactions in Neelkanth,“ Bhavik Bhimjyani said in an email response. An email sent to UIVC remained unanswered until the time of going to press.
The fund also counts Bhimjyani’s relatives Tulsi Bhimjyani and Anshul Bhimjyani as respondents.But Tulsi Bhimjyani responded that he and his family are neither directors nor shareholders. The petition has alleged that Bhimjyani held illegal meetings without notifying the fund and tried to take control of the board by in creasing the number of nominee directors to 10 from two. In 2007, UIVC had invested Rs.50 lakh as equity for a 40% stake in Neelkanth Township & Construction, while the promoters invested Rs.75 lakh for the remaining 60%. The fund also invested Rs.51 crore through debentures. Neelkanth Township was looking to acquire about 150 acres of land in Alibaug, near Mumbai, to develop a project to build bungalows.
In 2007-2008, UIVC had invested in two projects -Alibaug and Pune –through debentures and equity .The petition says that the builder’s loan and interest repayment defaults would cumulatively amount to Rs.200 crore since 2010-11.
UIVC has also filed an application in the Bombay HC to appoint an arbitrator for its ongoing disputes.
The petition also points out that UIVC found out in August 2015 that Neelkanth Township, at the instance of the promoters, had paid Rs.5.27 crore as advance to another promoter-group company –Lighthouse Developers. The advance was paid for purported acquisition of land without indication of any location, price or area. Further, it mentions that this sum was used by Lighthouse Developers to repay the promoters’ loan and not for buying land. However, according to Bhimjyani, there is no illegal or unfair conduct either at the board or general body meetings of Neelkanth under the current management. His emailed response says, “There has been no misappropriation of funds or creation of any fraudulent accounts or related party transactions. Allegations of non-supply of accounts belatedly made are false.“
According to Bhimjyani, the nominees of UIVC had not attended any board or general body meeting of Neelkanth between 2011 and 2015.From 2007, the fund hasn’t made any allegations of non-receipt of notice, either of the board or of the general body meeting of Neelkanth and were made for the first time in 2015, close to the fund’s expiry date.
Both parties had also held meetings between 2011 and 2012 for settlement of the issue through mediation of a large business house. However, the settlement could not be reached as the promoters of Neelkanth reneged from the terms agreed during these meetings.
Credits ET Realty