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The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted a plea for insolvency by Rattan India Finance against Cox and Kings for default over a loan of Rs. 30 crores. Cox and Kings is a travel agency company and it could not repay the outstanding dues because of which Rattan Indian Finance filed a petition for the initiation of insolvency proceedings against Cox and Kings.
Alok Kumar Agarwal has been appointed as the Interim Resolution Professional (IRP) who is from Gurgaon. He was appointed on Tuesday to oversee the matter and apparently Alok is aware of the matter already. The written order is yet to be made available.
It is stipulated that Cox and Kings defaulted on payment of dues twice in the same year i.e. 2019. Once in June 2019, when the company itself informed the Stock Exchanges that it failed to repay a loan of Rs. 130 crores out of a total loan of Rs. 200 crores which was advanced to the company by two investors. The second time when the loan obligation of Rs. 30 crores was defaulted by the company.
The company further said that the company’s license to sell air tickets was cancelled by the International Air Transport Association (IATA) last month. The International Air Transport Association also asked Cox and Kings to submit its license back to the authority. The Company had however requested the authority to reinstate its license against clearance of dues.
Later in the month of September, the company sold its travel unit to Ebix Software. The amount for which the sale was made has not been disclosed by Cox and Kings yet.
On October 15, 2019, the Chief Financial Officer of the company resigned from his position stating ‘’personal reasons’’ as the reason for such resignation. An associate partner from Dhir & Dhir Associates said that the resignation could be to challenge the Resolution Professional to treat the company as a going concern when the vendors of the company are spread all over the world that may get apprehensive after the initiation of insolvency proceedings and hence the contracts entered into by the company might get terminated.
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