The Reserve Bank of India (RBI) has moved the National Company Law Appellate Tribunal (NCLAT) challenging an order by the Kolkata bench of the National Company Law Tribunal (NCLT) allowing non-bank financier Srei group to skip repayments between 1 January and 30 June, said a person aware of the development.
Specifically, the regulator has appealed against a paragraph in the 30 December NCLT order that said that “all governmental or regulatory authorities shall be estopped from taking any coercive steps” against the company, said the person cited above.
“…We direct that in the meantime till further orders, the creditors of the applicant company covered under the scheme shall maintain status quo with respect to their contractual terms dues claims and rights and the creditors and all regulatory authorities shall be estopped from taking any coercive steps including reporting in any form and/or changing the account status of the company from being a standard asset which will prejudicially affect the company and/or sanctioning and/or implementation of the scheme,” the NCLT said in its December order.
RBI is not the first institution to appeal against the Kolkata tribunal order. Ratings agencies had appealed against a section of the order that restricted them from considering non-payment of dues by the company as a default.
“It is further directed that the credit rating agencies shall not consider any such non-payment to be a default under the respective debt documents and shall maintain the rating(s) of Srei Equipment Finance Ltd (SEFL) at least that of investment grade,” the NCLT order said. However, on 2 March, the appellate tribunal in New Delhi passed an interim order staying that part of the order till 5 April.
Brickwork Ratings and others had separately moved NCLAT against the NCLT order. CARE Ratings recently downgraded Srei’s ratings for ₹29,240.3 crore debt to “default”, after this favourable NCLAT order in a separate case it filed along with others.
Debenture trustees Axis Trustee Services Ltd and Catalyst Trusteeship Ltd, which represent bondholders, have also jointly moved the tribunal against the order, which has impacted retail and institutional investors alike.
Kolkata-based Srei group was in December granted a moratorium on repayments by NCLT’s Kolkata bench from 1 January to 30 June.
