COC, in an official communication, through its lawyer Luthra and Luthra, on Monday, has further asked IIHL to provide all necessary information, documents and cooperation to obtain the pending regulatory approvals, especially from the Indian insurance regulator IRDAI, at the earliest
Mumbai:
After Mumbai bench of the National Company Law Tribunal approved Hinduja Group firm IndusInd International Holdings'(IIHL’s) Rs 9,650-crore resolution plan for Reliance Capital Ltd(RCL), the Reliance Capital Committee of Creditors (COC) has urged the IIHL to implement the resolution plan and pay the sum by 31 March 2024, as committed by one of its promoters Ashok Hinduja.
COC, in an official communication, through its lawyer Luthra and Luthra, on Monday, has further asked IIHL to provide all necessary information, documents and cooperation to obtain the pending regulatory approvals, especially from the Indian insurance regulator IRDAI, at the earliest.
A similar letter has already been written to IIHL, which also the promoter of IndusInd Bank, by the administrator of RCL Nageswara Rao Y.
However, Hindujas have indicated that they will go by the time frame specified by the NCLT, which in its order had said that resolution plan can be implemented within 90 days from the the plan’s approval(Feb 27), .
In an official letter to Moses Newling Harding John, director of Mauritius based IIHL, the the CoC has said,“The Resolution Plan has now been approved by the NCLT under the relevant provisions of the code by way of its order dated February 27, 2024. We are in receipt of the plan approval order. However, the CoC notes that till date, certain documents and information in relation to regulatory approvals (IRDAI) continue to be pending at IIHL’s end, as also the implementation steps, despite multiple follow ups. In light of the above, the CoC hereby requests IIHL to provide the necessary information/ documents and cooperation in order to obtain relevant regulatory approvals at the earliest. The CoC further requests IIHL to ensure that, in line with its own commitment, the Resolution Plan is implemented on or before March 31, 2024.’’
In August 2023, Torrent Investment had appealed to the Supreme Court in a bid to prevent the NCLT from considering IIHL’s settlement plan. However, the apex court refused to interrupt the NCLT proceedings.
“Though, Torrent case is still pending in the SC, the administrator of RCL can go ahead and implement the resolution plan as approved by the NCLT,” said industry sources.
Apart from other financial entities, RCL is also the holding company of two insurers-Reliance General Insurance and Reliance Nippon Life Insurance.
IIHL had emerged as the highest bidder with an offer of ₹9,650 crore to take over debt-ridden Reliance Capital in the second round of auction concluded in April 2023.
Earlier, the Competition Commission of India (CCI) has already approved acquisition of controlling stake in Reliance Capital Ltd by Hinduja group-owned entities like IndusInd International Holdings Ltd, IIHL BFSI (India) Ltd, and Aasia Enterprises LLP.
RCL is undergoing insolvency resolution proceedings initiated under the Insolvency and Bankruptcy Code (IBC).
Under the resolution plan cleared by the Mumbai bench of NCLT, creditors to the company will take a massive 63 per cent haircut. Out of the total claims of Rs 38,526.42 crore, only Rs 26,086.75 crore were admitted by the tribunal.
The winning bidder has agreed to pay only 37 per cent or Rs 9,661 crore of the admitted claims, which means a 63 per cent haircut on the exposure of the creditors.
In June, the lenders of the crippled Reliance Capital accepted the revised Rs 9,661 crore bid by IndusInd International Holdings.
In November 2021, the Reserve Bank of India (RBI) superseded the board of Reliance Capital in view of payment defaults and serious governance issues and had appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm..