Union Bank starts insolvency proceedings against Rolta India

Rolta India, a provider of geospatial and IT solutions to government and non-government organizations in India, said it received a notice informing it that Union Bank of India has started insolvency proceedings against the company.

The proceedings have been started in the National Company Law and Appellate Board on 17 days ago.

“The company has been facing mismatch in the cash flows due to continuous delay in recovery of dues from government/ semi-government organizations and simultaneous investment in a long term prestigious project which have been duly intimated to the Stock Exchanges from time to time.

“In view of certain delayed payments to the banks as a result of the above leading to ‘default’ under the RBI Circular, the company approached the consortium banks with a resolution plan by undertaking various strategic steps including monetization of certain valuable Intellectual Property Rights of the Company and pay the overdue amount by 31 December 2018,” it said.

Rolta had earlier suggest to Union Bank of India that it should not go ahead with recovery proceedings in the National Company Law and Appellate Board “in view of certain approvals granted by the consortium banks on 28 August 2018.”

It also noted that a related matter is being heard by the Supreme Court.

Rolta India had earlier faced allegations by California-based short-seller Glaucus Research, which raised questions about the genuineness of the capital expenditure incurred by the company.

It today sought to reassure investors that its operations were going on as usual.

“The world-wide operations of the company including India are business as usual with continued project wins and implementation through its cutting-edge technology,” it said.

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