The Administrator of Anil Ambani’s debt-ridden Reliance Capital (RCAP) has filed an affidavit with the National Company Law Tribunal (NCLT), accusing IndusInd International Holdings Ltd (IIHL) of non-compliance. The Hinduja Group firm failed to meet the conditions set by the tribunal in a July 23 order.
In its affidavit, the Administrator informed the NCLT that instead of depositing Rs 2,750 crore in the designated escrow accounts of the Committee of Creditors (CoC) in India and abroad, IndusInd International Holdings Ltd (IIHL) has deposited the money in its own accounts as well as the promoters’ accounts. This information was reported by PTI.
IIHL, in a separate affidavit, stated that it has the funds and will transfer them once the escrow account is in place, which has outlined conditions. An IIHL spokesperson explained that opening an escrow account involves terms and conditions based on a bilaterally signed agreement. The trustee decides the fate of the funds based on whether these terms and conditions are met.
Sources claim that the CoC and administrator are misleading when they state that IIHL has not transferred the funds to the escrow account, which was opened unilaterally.
According to the NCLT order dated July 23, the successful bidder, IIHL, was required to fulfill certain conditions by July 31, 2024. These conditions included depositing the initial equity amount of Rs 250 crore in a domestic escrow account designated by the CoC and Rs 2,500 crore in an offshore escrow account, also designated by the lenders, by July 31. However, the Administrator alleged that IIHL deposited funds into the accounts of Harsha Ashok Hinduja, Shom Ashok Hinduja, and Ashok P. Hinduja. Similarly, Rs 2,500 crore was deposited in IIHL’s own accounts with the Standard Chartered Bank, Mauritius and State Bank of Mauritius.
The Administrator informed the NCLT, Mumbai bench that, as per the order, the escrow accounts were opened well in advance, and the details were shared with IIHL on July 27. However, the company failed to deposit the money into the CoC designated accounts. Additionally, IIHL has failed to provide the details of the binding term sheets for raising Rs 7,300 crore debt to the Monitoring Committee.
The hearing on IIHL’s plea at NCLT is scheduled for next week.
After IIHL’s delay on the third deadline on May 27, the NCLT, on July 23, gave the entity until August 10 to finalize the deal. The Hinduja Group firm cited pending regulatory approvals and compliance requirements as reasons for the extension.
The National Company Law Tribunal (NCLT), on February 27, 2024, approved IIHL’s Rs 9,650-crore resolution plan for Reliance Capital. In November 2021, RBI superseded the board of Reliance Capital due to governance issues and payment defaults by the Anil Dhirubhai Ambani Group company. The central bank appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 to take over the company. Reliance Capital had a debt of over Rs 40,000 crore. (Except for the headline, this story has not been edited by DNA staff and is published from PTI)
