NCLT To Hear Reliance Capital And IndusInd Resolution Plan Matter

NCLT To Hear Reliance Capital And IndusInd Resolution Plan Matter

The Anil Dhirubhai Ambani Group sought directions to transfer Rs.2,750 crore to the escrow accounts designated by the CoC

The Mumbai bench of the National Company Law Tribunal (NCLT) will hear an interlocutory application filed by the administrator of debt-ridden Reliance Capital (RCAP) seeking directions to the Hinduja Group firm IndusInd International Holdings Ltd (IIHL) for implementation of the resolution plan by 10 August.

The administrator requested the tribunal to direct the IIHL to immediately transfer Rs.2,750 crore to the escrow accounts designated by the Committee of Creditors (CoC).

As per the 23 July NCLT order, the successful bidder, IIHL, had to comply with certain conditions by 31 July.

The conditions included depositing the initial equity amount of Rs.250 crore in a domestic escrow account designated by the CoC and Rs.2,500 crore in an offshore escrow account designated by the lenders.

However, the administrator alleged that IIHL deposited the amount in the accounts of Harsha Ashok Hinduja, Shom Ashok Hinduja, and Ashok P. Hinduja. Similarly, Rs.2,500 crore was deposited in IIHL's accounts with the Standard Chartered Bank, Mauritius, and State Bank of Mauritius.

The administrator requested the NCLT to direct IIHL to share with the Monitoring Committee the copies of the binding commitment letter, enclosing the term sheets issued by Barclays Banks and 360 One.

He demanded action by the NCLT against the IIHL to comply with the 23 July order, which was not done.

After IIHL's delay on the third deadline on 27 May, the NCLT on 23 July gave it time till 10 August to conclude the deal. The IIHL cited pending regulatory approvals and compliance requirements as reasons for the extension.

On 27 February, the tribunal had approved IIHL's Rs.9,650 crore resolution plan for Reliance Capital.

In November 2021, the Reserve Bank of India (RBI) superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company. It 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 CoC rejected all plans for lower bid values and a challenge mechanism was initiated in which IIHL and Torrent Investments participated.