The State Bank of India (SBI), the lead bank of the consortium of lenders, approached the National Company Law Tribunal (NCLT) in a case against Videocon for a loan default of Rs 3,900 crore. As reported in December 2017, the Reserve Bank of India (RBI) in its second list of big defaulters had identified 28 defaulter companies, among which, big names like Jaiprakash Associates and Videocon are included. Videocon owes over Rs 29,000 crore to the cartel of banks. Some of the other large accounts present on the list were: IVRCL Ltd, Hyderabad-based infrastructure player which had a loan default of Rs 10,107 crore; Uttam Galva Steels Ltd, one of the largest manufacturers of cold rolled steel which had a loan default of Rs 4,150 crore; Soma Enterprises (Rs 1,895 crore); Asian Colour Coated Ispat (Rs 3,019 crore); Castex Technologies, Coastal Projects, East Coast Energy, Orchid Pharma, SEL Manufacturing, Uttam Galva Metallic, Visa Steel, Essar Projects, Jai Balaji Industries, Monnet Power, Nagarjuna Oil Refinery, Ruchi Soya Industries, and Wind World India. December 13, 2017 was the deadline given to Videocon and other companies to restructure their debt, failing which the central bank had asked lenders to initiate the insolvency process against them. The lenders, however, attempted to negotiate for a resolution and even asked for deadline extension for big defaulters (Videocon and Jaiprakash Associates). The RBI asked the banks not to move to NCLT against Jaiprakash Associates as there were several cases in the SC against the company and the decision was pending.
As reported in December 2017, on failing to deliver ‘Wish Town’, Jaiprakash Associates’ subsidiary Jaypee Infratech was already in legal trouble; however, this saved it from going into insolvency. The RBI, in August 2017, had asked banks to either resolve the 28 more large stressed accounts or refer them to the NCLT by December 31, 2017. These accounts, together, account for 40% of bad loans of around Rs 4 trillion. In this regard, a senior bank official said, “Except for Anrak Aluminium, Jayaswal Neco Industries, Soma Enterprises, and Jaiprakash Associates, all other accounts are going to the NCLT (for resolution).” All these 28 companies identified are those accounts that were given six months time for debt restructuring.