Mumbai: The National Company Law Tribunal (NCLT) has granted more time to Hinduja Group-owned IndusInd International Holdings (IIHL) for securing the remaining regulatory approvals required to complete the resolution process of bankrupt Reliance Capital, according to two people aware of the matter.
Approvals and compliance
The order was delivered on IIHL’s application on Wednesday, requesting an extension of the 27 May deadline for paying ₹8,000 crore to acquire Reliance Capital. The group cited pending regulatory approvals and compliance requirements as reasons for the extension.
“The court further directed that no coercive action can be taken by the CoC (committee of creditors), including no encashment of any bank guarantee of ₹483 crore submitted by IIHL, as demanded by some of the CoC members,” said the people cited above, seeking anonymity.
On 18 May, Mint had reported that the Mauritius-based entity, IIHL, had informed lenders that it is awaiting a few more regulatory and legal clearances before making the full payment. However, the CoC as well as the administrator opposed its request, suspecting a deliberate attempt by the group to further delay the implementation of the resolution plan.
Also Read: Lenders refuse to extend RCap resolution deadline as Hindujas delay repayment
NCLT has asked the lenders to file their responses by 3 June, and the matter will be heard on 6 June.
According to IIHL, it requires the approval of both Securities and Exchange Board of India (Sebi) and the Insurance Regulatory and Development Authority (Irdai) for the restructured consortium that will acquire RCap.
Structure change
Earlier this month, the Hinduja group had changed the structure of the consortium bidding for RCap by inducting four new entities led by an Indian firm, Aasia Enterprises. This was done to meet the foreign direct investment (FDI) ceiling requirement of 74% for the insurance sector.
Furthermore, IIHL believes that as the matter is still pending before the Supreme Court, following a petition filed by the Torrent Group, which has opposed the second round of the auction for RCap, the payment cannot be made by 27 May, thatis, within three months of the NCLT approval.
This turn of events is interesting as IIHL’s chairman Ashok Hinduja, in a meeting with media-persons on 3 May, said there were no further regulatory or judicial approval required, barring Irdai’s consent, and the group can make the payment within 48 hours once this approval was granted.
Hinduja had also clarified that the pending petition before the apex court filed by the Torrent group is not a deterrent for them to go ahead with the transaction.
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Published: 23 May 2024, 10:01 PM IST
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