Insolvency case: NCLT orders liquidation of debt-ridden Sterling Biotech

The Bench of the National Company Law Tribunal (NCLT) here has ordered the liquidation of debt-ridden pharmaceutical company Sterling Biotech. 

This is a setback for its lenders. They were hoping they could withdraw the insolvency proceedings and accept a one-time settlement (OTS) offer from the promoters.

The tribunal had reservations on this. It also felt that by accepting a withdrawal of insolvency proceedings (under Section 12A of the Insolvency and Bankruptcy Code), the company would essentially revert to the promoters, who are absconding and been declared as wilful defaulters. Section 29A of the Code prohibits promoters of a defaulting company from bidding