Lenders Accuse Hinduja’s IIHL of Devious Delay Tactics Risking Reliance Capital’s Future
90-Day Delay: IIHL Awaits DIPP Approval for Reliance Capital Acquisition
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Last Updated: Sep 01, 2024 | 4:36 PM IST
Lenders to the debt-ridden Reliance Capital Ltd (RCAP) have accused Hinduja Group’s IndusInd International Holdings Ltd (IIHL) of causing delays in implementing the resolution plan approved by the National Company Law Tribunal (NCLT) in February. It has been 90 days since IIHL submitted an application with the Department for Promotion of Industry and Internal Trade (DIPP), but the approval remains pending.
IIHL, based in Mauritius, emerged as the successful bidder to acquire Reliance Capital, with a resolution plan worth Rs 9,861 crore. Sources allege that seeking DIPP’s approval was not stipulated by the NCLT and seems to be an afterthought by IIHL. The approval is necessary because some of IIHL’s shareholders are residents of Hong Kong, which, under Press Note 3, mandates government approval for investments involving entities or individuals from nations sharing a land border with India.
On August 12, the NCLT directed the Reserve Bank of India (RBI) and DIPP to accelerate the approval process. Meanwhile, IIHL has committed to paying the full consideration of Rs 9,861 crore upon receiving regulatory permissions and resolving outstanding GST issues.
Reliance Capital, with a debt exceeding Rs 40,000 crore, saw the RBI supersede its board in November 2021 due to governance issues and payment defaults. Nageswara Rao Y was appointed as the administrator and invited bids for the company in February 2022. Initial bids from four applicants were rejected for lower valuation, prompting IIHL and Torrent Investments to engage in a challenging mechanism.
The next NCLT hearing on RCAP’s resolution plan is scheduled for September 19, 2024.
First Published: Sep 01, 2024 | 4:31 PM IST
Original Story https://www.business-standard.com/industry/banking/lenders-to-reliance-capital-accuse-iihl-of-using-delaying-tactics-124090100360_1.html
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