NCLT Case Filed Alleging Yes Bank-Suraksha ARC Collusion to Engineer SLDPL Insolvency

A suspended director of Sapphire Land Development Pvt. Ltd. (SLDPL) has moved the National Company Law Tribunal (NCLT), Mumbai against Suraksha Asset Reconstruction Company (ARC) alleging fraud, irregularities, and violations of regulatory norms in the company’s insolvency process.The application was filed by Lakhminder Dayal Singh, who served as director of SLDPL before it was admitted into the Corporate Insolvency Resolution Process (CIRP) in 2021. Singh claims that the very foundation of the case is flawed and rests on questionable arrangements between Yes Bank and Suraksha ARC.The case is likely to be heard by the NCLT in the coming weeks.Singh’s plea argues that the transfer of SLDPL’s loan from Yes Bank to Suraksha ARC was not a legitimate

deal but a structured “circular funding” exercise. Singh alleges that Yes Bank allegedly indirectly financed Suraksha’s acquisition of the distressed debt through a related entity, allowing the funds to circle back to the lender.According to him, this arrangement amounts to round-tripping and evergreening of loans practices explicitly barred under Reserve Bank of India (RBI) guidelines. Singh cites findings from a Yes Bank audit report, also referenced in a Central Bureau of Investigation (CBI) chargesheet, to back his claim of irregularities.The petition further states that Yes Bank wrongfully classified SLDPL’s loan account as stressed despite timely repayments. Singh contends that this misrepresentation created an artificial default situation, giving Suraksha ARC grounds to initiate insolvency proceedings.Singh has also raised objections against the conduct of Resolution Professional (RP) Snehal Kamdar. He claims he was denied access to company records and excluded from Committee of Creditors (CoC) deliberations, despite his statutory right as a suspended director under the Insolvency and Bankruptcy Code (IBC) to remain informed. RP Kamdar denied to comment on the allegations since the matter is sub-judiced. Application has included the RBI as a party to the proceedings. The application alleges that multiple provisions of the central bank’s framework on asset classification, loan transfers, and ARC funding structures were violated by the ARC, undermining the legitimacy of the insolvency process.Through his plea, Singh has requested the tribunal to annul the admission of the insolvency case, declare Suraksha ARC ineligible as a financial creditor, dissolve the CoC, and restore management control of SLDPL to its board. He has further sought a stay on all CIRP activities until the matter is resolved.