MUMBAI: The National Company Law Tribunal (NCLT) has instructed the Reserve Bank of India (RBI) and the Department of Industrial Policy and Promotion (DIPP) to speed up the approval process necessary for implementing Reliance Capital’s resolution plan, proposed by Hinduja Group’s IndusInd International Holdings Ltd (IIHL).
The NCLT’s Mumbai bench, led by Justice Virendrasingh G Bisht and Justice Prabhat Kumar, also instructed IIHL and the Committee of Creditors (CoC) to convene a joint meeting to determine the steps required for executing the resolution plan.
The tribunal was addressing a petition from the Hindujas, seeking a modification of its July 23 order and requesting an extension to fulfill the obligations for implementing the resolution plan.
August 10 deadline
After IIHL missed the third deadline on May 27, the NCLT had extended the deadline to August 10 to finalise the deal.
The Hinduja Group attributed the delay to pending regulatory approvals and compliance requirements.
Representing the Hindujas, senior advocate Abhishek Manu Singhvi argued that delays in approvals from four regulatory agencies—DIPP, Securities and Exchange Board of India (SEBI), RBI, and Insurance Regulatory and Development Authority of India (IRDAI)—as well as a GST liability mentioned in the order, were beyond the company’s control.
Deposits made
Singhvi informed the tribunal that IIHL had already deposited Rs250 crore in a domestic escrow account designated by the CoC and Rs2,500 crore in an offshore escrow account designated by the lenders.
He requested a six-week extension to resolve approval-related issues. However, Gaurav Joshi, representing the CoC, argued that IIHL was attempting to modify the plan, which would necessitate re-approval from the regulatory agencies.
He stated that the extension should not be open-ended and suggested a 15-16 day extension instead. The tribunal has scheduled the next hearing for August 28.
Earlier, on February 27, 2024, the NCLT had approved IIHL’s Rs9,650 crore resolution plan for Reliance Capital.
The RBI had taken control of Reliance Capital in November 2021 due to governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.
Nageswara Rao Y was appointed as the administrator and invited bids in February 2022 to take over the company.
Despite an initial debt of over Rs40,000 crore, the CoC rejected the initial bids from four applicants for being too low, leading to a challenge mechanism in which IIHL and Torrent Investments participated.
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