The National Company Law Tribunal (NCLT) has requested a response from PC Jeweller regarding an insolvency plea filed against the company by State Bank of India (SBI). The case is scheduled for a hearing on August 21.
SBI moved the insolvency plea against PC Jeweller at NCLT, and the tribunal took up the matter on July 26. A notice was issued, and the case was listed for consideration on August 2, 2023. PC Jeweller asked for more time to file a response, leading to the postponement of the hearing.
The trouble for PC Jeweller began in February 2023 when banks decided to recall loans extended to the company. It was revealed that the company had defaulted on loans worth Rs 3,466 crore from various banks and financial institutions. A loan recall is a formal communication where the lender requests the immediate repayment of the outstanding loan balance.
According to the annual report filed by PC Jeweller for fiscal 2021-22, the company had borrowed money from 14 banks, including SBI, Indian Bank, Union Bank, and Punjab National Bank. The outstanding debt to these banks amounted to Rs 3,278 crore, including interest and the base amount. Among the lenders, SBI had the largest outstanding amount of Rs 1,060 crore, followed by Union Bank of India with Rs 530 crore, Punjab National Bank with Rs 478 crore, and Indian Bank with Rs 226 crore.
In addition to the insolvency issue, PC Jeweller has faced trouble with the Securities Exchange Board of India (SEBI) over insider trading allegations. On February 2 this year, SEBI sought a clarification from PC Jeweller on its share price movement in the market, as the company's shares experienced a significant decline during a trading session.
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