The bankruptcy court in Mumbai is likely to pronounce its ruling on Tuesday in an application filed by the administrator of Reliance Capital Ltd to approve the company’s acquisition by IndusInd International Holdings Ltd through the insolvency resolution process.
The division bench of Justice Virendra Singh Bisht and a technical member Prabhat Kumar is expected to pronounce its ruling on the approval plan of the Hinduja group-owned IndusInd International Holdings.
Last year on June 29, the e-voting on resolution for approval of the resolution plan concluded, Reliance Capital’s Administrator Nageswara Rao Y said in a stock exchange announcement. However, he didn’t disclose the financial details in the stock exchange announcement.
The order is likely to be pronounced in the backdrop of the development wherein the veteran lawyer Shardul Shroff had approached the Supreme Court on behalf of Torrent Investments in October last year to speed up the hearing on the company’s application to stay the second challenge mechanism in a corporate insolvency resolution process (CIRP) for the Anil Ambani-promoted Reliance Capital.
At the heart of the dispute is a bid from the Hinduja Group entity given 24 hours after the auction deadline (December 21, 2022), trumping the offer made within the stipulated time by Torrent Investments. Lenders decided to hold a second round of auction and that matter is pending before the Supreme Court.
While Torrent was the highest bidder offering Rs 8,640 crore in the first round, Hinduja offered Rs 9,660 crore in the second round. Torrent Investments, which was also in the fray for the distressed finance company, refrained from submitting a final plan to the lenders concerned.
In June, 99% of the lenders voted in favour of IIHL’s plan. The administrator has admitted Rs 25,345 crore of claims from lenders as of June 8, 2023.
Now, Torrent Investments has challenged the view taken by NCLAT about Regulation 39 (1A) of the Insolvency and Bankruptcy Board of India (IBBI) that it does not restrict the rights of lenders to continue negotiation on financials and the decision to do a Second Challenge Mechanism even after its conclusion is not violative of Regulation 39(1A) of the CIRP Regulations.
As per Regulation 39(1A), the bidder must prepare a resolution plan in accordance with the bankruptcy code and submit the resolution plan to the RP within the time given in the invitation made by the RP or administrator in the current case.
In November 2019, the tribunal allowed an application to initiate an insolvency process against the debt-laden financier.
Source: Economic Times