The Mumbai bench of NCLT is expected to hear on Wednesday an interlocutory application filed by the Administrator of debt-ridden Reliance Capital (RCAP) seeking directions to IIHL for implementation of the resolution plan by August 10. The Administrator, through its interlocutory application filed on August 5, has also asked the NCLT to direct Hinduja Group firm IndusInd International Holdings Ltd (IIHL) to immediately transfer Rs 2,750 crore to escrow accounts designated by Committee of Creditors (CoC).
As per the NCLT order dated July 23, the successful bidder, IIHL, had to comply with certain conditions by July 31, 2024.
These conditions included depositing the initial equity amount of Rs 250 crore in a domestic escrow account designated by CoC and Rs 2,500 crore in an offshore escrow account again designated by the lenders by July 31.
However, the Administrator alleged that IIHL deposited in the accounts of Harsha Ashok Hinduja, Shom Ashok Hinduja, and Ashok P. Hinduja. Similarly, Rs 2,500 crore were deposited in IIHL’s own accounts with the Standard Chartered Bank, Mauritius and State Bank of Mauritius.
The Administrator has also asked NCLT to direct IIHL to share with the Monitoring Committee the copies of the binding commitment letters enclosing the term sheets issued by Barclays Banks and 360 One, as per the application seen by PTI.
The Administrator has requested that the NCLT should take judicial notice of this fact and direct IIHL to comply with the July 23 order, which it has failed to do.
After IIHL’s delay on the third deadline on May 27, the NCLT on July 23 gave the entity time till August 10 to conclude the deal. The Hinduja Group firm cited pending regulatory approvals and compliance requirements as reasons for the extension.
The National Company Law Tribunal (NCLT) on February 27, 2024 approved IIHL’s Rs 9,650-crore resolution plan for Reliance Capital.
In November 2021, the Reserve Bank superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company. The central bank had appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 to take over the company.
Reliance Capital had a debt of over Rs 40,000 crore, and four applicants had initially bid with resolution plans. However, the committee of creditors rejected all four plans for lower bid values and a challenge mechanism was initiated in which IIHL and Torrent Investments participated.
