It was summer 2016. Gautam Thapar was in heat in more ways than anyone.
His plan to offload Ballarpur Industries Ltd.’s (BILT) stake in Malaysian pulp maker Saba Forest Industries was slowly creeping in. The new deadline of March 31, 2016, was also slipping and lenders were already nervous. Some foreign lenders pulled the limit on taking Rs 700 crore boxing Thapar to the corner.
Under these circumstances, Thapar and his associates met with Aditya Birla’s head of financial services, Aditya Birla Ajay Srinivasan, and discussed the Thapar Group Strategy.
At this March 2016 meeting, the plan to stop the Rs 50 crore facility granted to BGPPL was completed.
Since the BILT group did not have enough internal earnings and Aditya Birla Financial, NBFC branch of Aditya Birla Group did not want further direct risk, they planned to use some land parcels, which were already loaded, to infuse around Rs 200 crore in funds into CG power group, a part of which was to be used for repayment of BGPPL loan.
The ‘structure’ created using two Special Purpose Vehicles (SPV) namely Blue Garden Estate Pvt Ltd (BGEPL) and Acton Global Limited (AGL) has now landed ABFL is a prob by SEBI.
In the last week of May this year, SEBI had issued a show-cause notice to ABFL for allegedly conniving with promoters to divert funds and assets related to CG Power and Industrial Solutions.
SEBI found that the SPV has shell companies floated to transfer funds without the knowledge of the board of the listed entity. CG Power Executives told SEBI that these structures were designed by ABFL stoic in line with NBFCs’ regulatory requirements, but ABFL maintained that they were created by CG Power Executives.
For payment of the considered amount for this lease, AFL sanctioned a loan of Rs.200 crore to BGEPL and disbursed it in two instalments of Rs.150 crore (May 12, 2016) and Rs.50 crore (August 17, 2016) and on the same day, the amount was immediately transferred to CG Power.
On August 10, 2016, CG Power transferred Rs 53 crore to AGL without interest. On August 12, 2016, mutual funds worth Rs 51.57 crore purchased by AGL were marked in favor of ABFL against BGPPL’s loan.
It was later adjusted in place of a loan of Rs 50 crore taken by BGPPL. In short, CG Power transferred Rs 53 crore to AGL and in return, AGL effectively transferred Rs 50 crore to ABFL on behalf of BGPPL to repay its loan liability.