The committee of creditors (CoC) of bankrupt firm Reliance Capital has written to IndusInd International Holding (IIHL), a Mauritius-based Hinduja group entity, stating that it has failed to deposit Rs 2,750 crore as its equity contribution for the acquisition of the firm before the deadline of July 31.
IIHL and other Hinduja group entities had won the race to acquire Reliance Capital, a financial services firm, in December 2022, but the acquisition is mired in litigation. The National Company Law Tribunal (NCLT) had asked IIHL to deposit the equity contribution in an escrow account by July 31 while extending the date to complete the entire process by August 10.
When contacted, a Hinduja source said the entire funding plan is in place and has already been submitted to the NCLT in a sealed envelope to prevent leakage of information. As per the court filing, IIHL has signed binding agreements with Barclays Bank and 360 One for loans worth Rs 7,300 crore. The Hinduja group did not comment on the issue.
In its letter dated August 1, Vistra Ltd (the designated entity of CoC), said the CoC would like to highlight that in terms of the order of the NCLT, IIHL was to deposit Rs 250 crore towards domestic equity in the escrow account in India and another tranche of Rs 2,500 crore was to be deposited in an offshore escrow account designated by the committee of creditors as a contribution towards the equity to be invested in Reliance Capital.
Besides, IIHL was to submit to the monitoring committee copies of the binding term sheets for the loan of Rs 7,300 crore.
“However, the CoC notes that IIHL has not complied with the directions of the NCLT. The monies have not been deposited in the CoC designated accounts as on July 31 and details of the CoC accounts and fund flow therefrom had been communicated to you by the administrator on July 26 and July 27,” the letter said. This paper has reviewed the CoC letter.
The letter said IIHL was also allowed the option to communicate details of the accounts which may be designated as CoC designated accounts on July 26 and July 30. “However, no such details were provided by you to the CoC and the executed term sheets have also not been provided to the monitoring committee,” the letter said.
“In view of the default of the NCLT order by you, the rights and remedies of the CoC, in law and equity as well as under the request for resolution plan, are expressly reserved. No delay, indulgence, act or inaction on the part of CoC shall be construed as a waiver of the aforementioned rights and remedies, unless expressly communicated in writing by the CoC,” the letter said.
First Published: Aug 02 2024 | 5:57 PM IST
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