In a significant setback for Hinduja Group-promoted IndusInd International Holdings (IIHL), the National Company Law Tribunal (NCLT) has ordered the company to deposit Rs 2,750 crore in a special escrow account within 48 hours. This directive is part of the resolution plan for Reliance Capital, which IIHL had secured through a bidding process. The tribunal’s order also clarified that the interest accrued on the money deposited in the escrow account will be credited to the Committee of Creditors.
Furthermore, the NCLT has directed IIHL to disclose the term sheet for its planned fundraising of Rs 7,300 crore through debt to the Monitoring Committee. This move aims to ensure transparency and accountability in the implementation of the resolution plan.
The Mumbai bench of the tribunal, comprising Justice Virendra Singh G Bisht and Justice Prabhat Kumar, was hearing a petition filed by the Hindujas seeking modifications to the tribunal’s July 23 order. They requested an extension to complete their obligations for implementing the resolution plan.
While partially allowing IIHL’s appeal, the tribunal directed the company to fully implement the resolution plan by August 10. The deposit of Rs 2,750 crore is to be made in two parts: Rs 2,500 crore in the offshore escrow account of Vistra with Yes Bank in the Gift City and Rs 250 crore in the Vistra’s Yes Bank escrow account in Mumbai.
Hindujas’ counsel Abhishek Manu Singhvi argued that if the NCLT did not consider modifying its order, the administrator, the CoC, and IIHL would face significant challenges in implementing the resolution plan for Reliance Capital. Singhvi presented a ‘compliance affidavit’ stating that IIHL had deposited the entire equity component of Rs 2,750 crore. However, this amount was deposited in accounts belonging to Ashok Hinduja, Harsha Hinduja, and Shom Hinduja.
The administrator argued that IIHL was seeking minor changes to the order and trying to shift the responsibility for implementing the plan onto them, which is not in accordance with the resolution plan. It’s worth noting that IIHL had emerged as the highest bidder in the auction for Reliance Capital, offering Rs 9,661 crore in cash and securing 99 per cent of the lender’s votes.
