₹63 Crore Potential Fraud Uncovered in HNG Transactions: Auditor BDO India
Auditor BDO India has flagged ₹63.34 crore in potentially fraudulent transactions by Hindusthan National Glass & Industries Ltd (HNG) during 2019-20 to 2021-22. The transactions involve three entities and are under scrutiny as part of the company's insolvency resolution process.
Fraudulent TransactionsHngBdo IndiaNcltInsolvency ResolutionReal Estate NewsAug 31, 2025
The three entities reportedly involved in the fraudulent or wrongful trading are Rafbrix International (Rs 15.10 crore), Maithan Ceramic Ltd (Rs 5.78 crore), and Durvish Vyapaar Pvt Ltd (Rs 42.46 crore), as per the report submitted to NCLT as part of the resolution process of the debt-ridden company.
The auditor in its report concluded that outstanding advances amounting to Rs 15.10 crores to Rafbrix International is a potential diversion of funds and the same can be classified under section 66 of the Insolvency and Bankruptcy Code (IBC) as 'fraudulent or wrongful trading'. A similar observation was made in the case of HNG trading with Durvish Vyapaar Pvt Ltd (Rs 42.46 crore) after a negative physical site visit, absence of basis for selection of the vendor, absence of adequate supporting documents, and absence of rationale for procuring material at a higher rate.
The forensic review has been conducted as part of the corporate insolvency resolution process (CIRP) of HNG, once India's largest glass container manufacturer. Debt-ridden HNG was admitted for resolution by the National Company Law Tribunal (NCLT) in October 2021 following a petition by lenders. Following the approval from the NCLT earlier this month, the Madhvani Group company INSCO has initiated the process of taking over HNG.
On August 14, 2025, the NCLT's Kolkata bench approved the resolution plan submitted by Independent Sugar Corporation Ltd (INSCO) for the revival of HNG. On June 13, 2025, the Committee of Creditors (CoC) approved the plan with an overwhelming 96.16 per cent majority. At the end of this 45-day monitoring phase, complete control of HNG will pass to the Madhvani Group. The Monitoring Committee will step down, and a new board nominated by the Group will take charge.
According to the NCLT order, the plan involves a total investment of Rs 2,250 crore, comprising Rs 1,900 crore in upfront cash, Rs 350 crore deferred over 3 years to CoC, and 5 per cent equity to creditors. As per the resolution plan, the upfront cash will be paid within 30 days of NCLT approval, with additional working capital infusion and equity issuance to CoC members to be completed within 90 days. Further, INSCO has committed Rs 1,000 crore in capital expenditure over the coming years to rebuild furnaces and modernise equipment.
Frequently Asked Questions
What are the total potentially fraudulent transactions detected by BDO India in HNG?
BDO India has detected potentially fraudulent or wrongful transactions worth Rs 63.34 crore in HNG during the three financial years 2019-20 to 2021-22.
Which entities are involved in the fraudulent transactions?
The entities involved in the fraudulent transactions are Rafbrix International (Rs 15.10 crore), Maithan Ceramic Ltd (Rs 5.78 crore), and Durvish Vyapaar Pvt Ltd (Rs 42.46 crore).
What is the status of HNG's insolvency resolution process?
HNG was admitted for resolution by the National Company Law Tribunal (NCLT) in October 2021. The Madhvani Group company INSCO has been approved to take over HNG with a resolution plan involving a total investment of Rs 2,250 crore.
What is the total investment commitment by INSCO for the revival of HNG?
INSCO has committed a total investment of Rs 2,250 crore for the revival of HNG, including Rs 1,900 crore in upfront cash, Rs 350 crore deferred over 3 years to the Committee of Creditors, and 5 per cent equity to creditors.
What additional steps are INSCO taking for HNG's revival?
INSCO has committed Rs 1,000 crore in capital expenditure over the coming years to rebuild furnaces and modernise equipment in HNG.
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