New Delhi, February 5: The Enforcement Directorate (ED) has scored a significant victory in the Alchemist Group case. The National Company Law Tribunal (NCLT) has completely revoked the Corporate Insolvency Resolution Process (CIRP) against Alchemist Limited in its order dated February 3. The tribunal recognized that this process was initiated with fraudulent intent and conspiracy.
The ED’s investigation revealed that companies within the Alchemist Group, such as Alchemist Holdings Limited and Alchemist Township India Limited, raised over ₹1,840 crores from investors under the pretense of providing high returns, plots, villas, or flats. However, investors received neither the promised properties nor their money back. Instead, these funds were diverted as inter-corporate deposits (ICDs) to other group companies, particularly Alchemist Limited. Since 2021, the ED has filed prosecution complaints and seized assets worth ₹492.72 crores.
The CIRP was initiated by Sai Tech Medicare Private Limited under Section 9 of the Insolvency and Bankruptcy Code (IBC). However, Alchemist Group companies dominated the committee of creditors, with Technology Parks Limited holding 97% of the voting rights. Other group companies, including Alchemist Township India Limited and Alchemist Realty Limited, were also implicated in the ED’s investigation. The ED presented evidence to the tribunal indicating that the bankruptcy process was being misused to release seized assets and gain exemptions under Section 32A of the IBC. Furthermore, the appointment of Gaurav Mishra, a former employee of the group, as the resolution professional raised questions about impartiality. The ED was not timely included as a party, indicating bad faith.
The NCLT upheld the ED’s arguments, stating that the IBC is a beneficial law meant to resolve genuine insolvencies, not to launder criminal proceeds or obstruct proceedings under the Prevention of Money Laundering Act (PMLA). The misuse of the IBC to facilitate money laundering is unacceptable. The independence of the Committee of Creditors (CoC) was compromised by the control of group companies. Continuing the CIRP under these circumstances would legitimize criminal proceeds and undermine the seizure of assets. The tribunal exercised its powers under Section 65 of the IBC and deemed the process fraudulent.
The order revoked the CIRP, lifted the stay imposed under Section 14, and annulled the appointment of the resolution professional along with all of his actions. An operational creditor, Sai Tech Medicare, was also fined ₹5 lakhs. This decision clarifies that the IBC and PMLA are distinct laws that can operate concurrently, but one law cannot be misused to undermine the other. This will aid in protecting investors’ interests and curbing crime.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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