Oswal Overseas Faces Multiple Challenges: Land Auction, Insolvency Petition, and CEO Resignation

Oswal Overseas Limited , a sugar manufacturer based in Uttar Pradesh, is facing a series of significant challenges, including a land auction, an insolvency petition, and the resignation of its Chief Executive Officer.

Land Auction Proceedings

Oswal Overseas Limited has disclosed that the Cane Commissioner of Uttar Pradesh has initiated auction proceedings for the company's land located at Village Bhikampur, Tehsil Nawabganj, District Bareilly. The auction is scheduled for September 8, and stems from non-payment of sugarcane farmers' dues amounting to Rs 70.34 crore. The land spans 3.713 hectares with an estimated value of Rs 1.37 crore. The company received the auction notice on August 16, and stated that the quantifiable financial impact cannot be determined at this time.

Insolvency Petition Filed

In addition to the land auction, Oswal Overseas Limited has received an advance service intimation regarding an insolvency petition filed by L H Sugar Factories Limited. The petition, filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, has been submitted to the National Company Law Tribunal (NCLT), New Delhi Bench.

The dispute centers around defaults under Inter-Corporate Deposit (ICD) arrangements. According to the petition, L H Sugar Factories Limited claims a default amount of Rs 2.25 crore. A demand notice was sent to Oswal Overseas on May 25, preceding the filing of the petition.

In response to this legal challenge, Oswal Overseas stated that it is seeking appropriate legal assistance from its advisors and counsels. The company emphasized that the matter is sub judice and that they are taking necessary steps to protect the company's interests.

Financial Implications Uncertain

While the insolvency petition cites a specific default amount, Oswal Overseas has indicated that the expected financial implications cannot be determined at this stage. The company attributes this uncertainty to the fact that the matter is in its initial stages before the NCLT.

CEO Resignation

Adding to the company's challenges, Oswal Overseas also announced the resignation of its Chief Executive Officer, Mr. Vijay Kumar Mishra. According to the company's filing, Mr. Mishra tendered his resignation effective September 5, citing "other better future prospects."

The company stated that it is in the process of appointing a suitable candidate for the position of CEO and Key Managerial Personnel (KMP). Oswal Overseas has assured stakeholders that it will inform the stock exchanges of any developments in due course, in accordance with applicable regulations.

Company's Response

Lalit Kumar, Company Secretary & Compliance Officer of Oswal Overseas Limited, issued statements regarding the insolvency petition, the CEO's resignation, and the land auction proceedings. The company has pledged to keep exchanges and stakeholders informed of any material developments in these matters.

As these events unfold, investors and stakeholders will be closely watching how Oswal Overseas navigates these challenges and their potential impact on the company's operations and financial stability.