Kenneth Andrade’s Old Bridge Capital Management has written to Securities and Exchange Board of India accusing Shapoorji Pallonji (SP) group of suppressing ‘material information’ in the initial public offering (IPO) prospectus of its subsidiary Sterling & Wilson Solar. The portfolio manager, an investor in the company, also alleged Sterling and Wilson’s board misused its powers by granting more time to promoters for repayment of loan.
The promoters were to use the funds raised from the Sterling and Wilson IPO to repay the loan to the company by November 18.
On November 15, promoters sought more time from the company’s board to repay loans worth Rs 2,341 crore citing unforeseen reasons, including a liquidity crisis. The announcement sparked outrage among institutional investors, sending the stock tanking by 20%.
Old Bridge Capital’s alternate investment fund was one of the investors in Sterling and Wilson IPO. The company got listed on August 20, 2019. While one of the objectives of the 2,850-crore IPO was to enable the promoters to repay loans amounting to Rs 2,563 crore within 90 days of IPO, the company received Rs 1,000 crore on December 31, 2019.
“We believe, based on the disclosures in the RHP, it clearly demonstrates that the board of directors and the audit committee had no locus standi in extending the timelines of repayment,” the letter said. ET has a copy of the letter. Promoters of Sterling and Wilson still owe the company Rs 1,644 crore for which they have sought a phased repayment schedule.
When contacted, the company spokesperson denied there was any concealment of material information in the prospectus.