Contractors Of Lanco Infratech To Sue Over Encashment Of Bank Guarantees

The sub-contractors of the debt-burdened engineering, procurement and construction (EPC) company, Lanco Infratech, will most likely take legal action against the company for an illegal invocation of their bank guarantees.

Lanco Infratech is one of the 12 stressed companies that are identified by the Reserve Bank of India as eligible for bankruptcy proceedings.

In the previous week, the New Delhi-headquartered Hindustan Powerprojects’ encashed bank guarantees of Lanco Infratech totalling Rs 500 crore after it alleged that the company had unfulfilled contractual obligations at the latter’s 2,520 MW Anuppur thermal power unit.

The sub-contractors of the company held Lanco Infratech responsible for cheating and collecting from the markets by encashing bank guarantees of several sub-contractors, citing that there is a non-fulfillment of work contracts.

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