Games promoters play

If a promoter knows that he can afford not to repay loans and buy back his company in the bankruptcy court at a discount with a reduced debt burden, he has a strong incentive to drive his firm aground

Some promoters of Indian companies never cease to surprise. Even as the Appellate Tribunal stayed the National Company Law Tribunal (NCLT) order directing the lenders of Dewan Housing Finance Ltd (DHFL) to consider Kapil Wadhawan’s offer, another Indian promoter last week decided to try his luck to derail the insolvency resolution process of one of his group companies.

Manoj Gaur, executive chairman of Jaiprakash Associates, wrote to the committee of creditors at Jaypee Infratech, proposing to settle the company’s dues in full “in the interest of homebuyers”. This, at a time when the company’s insolvency process is in the final stages.