The Committee of Creditors (CoC) of Reliance Capital (RCap) on Thursday filed a fresh application before the Delhi bench of the National Company Law Appellate Tribunal (NCLAT) seeking forfeiture of the equity component of IndusInd International Holdings Ltd. ₹2,750 crore in case of default by the Hinduja Group-owned company.
A copy of the petition has been seen. Mint.
In essence, the lenders are seeking modification of the July 23 NCLT order that allowed IIHL to take over the insolvent Reliance Capital for ₹9,861 crore. The lenders have since been at loggerheads with the Hinduja Group over the implementation of the resolution plan.
Lenders have asked IIHL to pay interest on the debt component of ₹7,300 crore from August 2023 till the actual date of payment, according to the petition filed before the appellate forum.
The IIHL was to deposit the initial capital amount of ₹250 crore rupees in a national escrow account and ₹2,500 crore in an overseas escrow account of the CoC by July 31, as per the approved plan. Subsequently, just as the deadline was approaching, IIHL filed an interlocutory application before the NCLT, seeking modification of the court order. In this regard, the administrator has opposed granting any relief to IIHL.
However, the NCLT had partially granted IIHL an extension till August 10 for implementation of the resolution plan.
Experts said the seizure of funds was appealed to secure the interest of lenders and protect them from further losses that would accrue due to the delay by IIHL in implementing the resolution plan approved by the NCLT.
Earlier in the NCLT, the CoC alleged that it had been deprived of timely payment of funds owed to it by the corporate debtor under the resolution plan. The resolution plan mandates IIHL to pay the lenders within 90 days from the date of the order.
“In the event IIHL fails to make payments within this period and defaults, then it will be required to pay interest to the CoC for the delayed payment and should also be required to place money in an escrow account which will be forfeited if there are further delays in implementing the resolution plan,” the 31-page petition said.
‘A significant amount of public funds is at stake’
The petition also points out that significant public funds are involved in this case as a huge amount of debt is owed to pension funds, retail bondholders, insurers including Life Insurance Corp., Employees’ Provident Fund Organisation and the army welfare fund etc. Therefore, it is imperative that the resolution plan is successfully implemented in a time-bound manner, one of the key objectives of resolution as per the IBC.
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