Troubles Mount for Shapoorji Pallonji Group as NCLT Slaps Notice Over Insolvency Plea

National Company Law Tribunal (NCLT) has issued a notice to Shapoorji Pallonji Group for an alleged default worth Rs 2.72 crore on Tuesday. The tribunal’s notice came after a complaint was filed by a Chennai-based firm, Intertouch Metal Buildings, for not receiving payments for its services since October 2022, according to the Mint. NCLT has given seven days' time to the construction-to-real estate conglomerate to file a reply. 

Apart from the request to initiate insolvency proceedings against the Shapoor Mistry-led SP Group, the Chennai-based company urged to appoint an interim resolution professional. The next hearing is scheduled for April 24.

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It contested that it hasn’t received payments for the work done by it in the shell-shaped terminal building at Port Blair’s Veer Savarkar International Airport, where Shapoorji Pallonji Engineering & Construction (E&C) company was the general contractor. 

“The airport construction is complete and fully operational. However, payments of Rs 2.72 crore remain outstanding from a total project value of Rs 15 crore,” said Intertouch Metal Buildings’s chartered accountant, according to the Mint’s report.  

The company contested that despite asking for the payments through a demand notice, only marginal payments were made, and a significant sum has still not been cleared by the 159-year-old conglomerate. 

“Even after serving a demand notice, we only received a small ratification request, which we duly complied with. Despite this, the payment has not been cleared,” the CA added.

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The recent development adds more trouble for the Shapoorji Pallonji (SP) group, which has been dealing with debt-related issues for quite some years now. The 159-year-old construction-to-real estate conglomerate is trying multiple ways to reduce its liabilities.  

According to a Reuters report, the group has secured investor commitments for over $4 billion for its debt sale in April. The conglomerate has reportedly planned to raise $3.2 billion to $3.3 billion via a bond issue. Foreign private credit funds like Ares Management and Farallon Capital Management are likely to be the biggest investors for the issue.