Former employees of Moser Baer Electronics Limited have submitted a contempt petition to the National Company Law Tribunal (NCLT), seeking action against the liquidator. The NCLT is set to review the petition on September 27, 2023.
Sandeep Tyagi, who is representing the former employees, revealed that they filed the contempt petition because the liquidator has not complied with the Tribunal’s orders to pay statutory dues, such as provident fund and gratuity, to ex-employees. Tyagi expressed their frustration, stating that they have been waiting for an extended period without any response from the liquidator.
Moser Baer Electronics Limited, a subsidiary of Moser Baer India Limited, entered bankruptcy proceedings in 2019, with creditors seeking liquidation to recover outstanding debts under the Corporate Insolvency Resolution Process (CIRP). Despite the passage of more than four years, the liquidation process remains ongoing. The company was known for manufacturing and selling electronic products, including LED bulbs, blank CDs, DVDs, storage products, computer peripherals, and pen drives.
Approximately 90 former employees of the company have been patiently waiting for their statutory dues and salaries, which have been unpaid for several months. The company, incorporated on November 14, 2006, with an authorized capital of Rs 110.30 crore and paid-up capital of Rs 6.27 crore, owes Rs 2.5 crore in liabilities to its employees.
Tyagi highlighted that approximately 40 employees are still awaiting payment of gratuity and several months’ worth of salaries, while around 60 employees are owed unpaid salaries. Tyagi emphasized their determination to fight for their rightful entitlements, even though the amount in question may not be substantial, the impact on the affected employees is significant.
Drawing a parallel with the liquidation of another company under the same promoter, Moser Baer India Limited, Tyagi expressed the hope that a similar resolution could be achieved for their case. Hemant Sharma, the liquidator appointed for Moser Baer Electronics Limited, also expressed a sympathetic stance regarding settling the dues owed to ex-employees. He explained that the company lacks a gratuity fund for payment and there is uncertainty regarding the process for paying these employees. Sharma confirmed that creditors have sought clarity from the court on the matter and they are awaiting further court directives, committing to adhere to the court’s instructions.
The Moser Baer case is marred by allegations that its promoters defrauded Central Bank of India, resulting in the diversion of Rs 354.51 crore. The Central Bureau of Investigation (CBI) filed an FIR against various individuals, including the company’s director Ratul Puri, his father and Moser Baer Managing Director Deepak Puri, Directors Nita Puri (Ratul’s mother), Sanjay Jain, Vineet Sharma, and others.
Prior to these allegations, the company had approached Central Bank of India for a loan, receiving a loan of Rs 100 crore and a comfort amount of Rs 49 crore on October 5, 2009. Subsequently, the bank sanctioned an additional Rs 100 crore to Moser Baer on September 29, 2010, followed by another Rs 100 crore on October 28, 2010. Over time, Moser Baer accrued substantial debt and failed to repay it, even after loan restructuring. Central Bank of India eventually classified Moser Baer as a Non-Performing Asset (NPA).
The situation worsened when Moser Baer initiated a lockout at its Greater Noida factory on November 4, 2017, leaving 2,280 employees uncertain about their future. On November 14, 2017, Moser Baer was admitted under the NCLT framework, and the process of liquidation commenced on September 20, 2018.
