The State Bank of India (SBI) has lodged an insolvency petition against PC Jeweller Limited at the National Company Law Tribunal (NCLT) in Delhi.
The hearing for the plea took place before the principal bench of NCLT on July 26 but has been adjourned to the first week of August for further proceedings.
PC Jeweller faced financial difficulties starting from February 2023 when banks decided to recall loans that were previously extended to the company. This decision came to light after a filing revealed that PC Jeweller had defaulted on loans amounting to Rs 3,466 crore from various banks and financial institutions. Loan recall is a process wherein the lending institution requests the borrower to return the borrowed amount.
The company’s annual report for the fiscal year 2021-22 disclosed that it had borrowed funds from 14 banks, including prominent ones like SBI, Indian Bank, Union Bank, and Punjab National Bank. According to the annual report, the total owed to the banks amounted to Rs 3,278 crore, which included both the principal amount and the interest.
Among the major lenders, SBI had the highest outstanding amount of Rs 1,060 crore, followed by Union Bank of India with Rs 530 crore, Punjab National Bank with Rs 478 crore, and Indian Bank with Rs 226 crore.
In addition to its financial troubles, PC Jeweller also faced allegations of insider trading from the Securities Exchange Board of India (SEBI). SEBI sought clarification from the company on February 2 of the same year when its share prices dropped from Rs 48 at the start of the trading session to Rs 43.50 at the session’s end.