RCap moves tribunal for IIHL payments
The administrator of bankrupt Reliance Capital Ltd (RCap) has moved the National Company Law Tribunal (NCLT) seeking its intervention to direct Hinduja Group’s IndusInd International Holdings Ltd (IIHL) to make payments in accordance with the approved resolution plan by 28 May.
“Great ‘prejudice’ will be caused to Reliance Capital if the application is not allowed,” the administrator said in its petition, which Mint has seen.
The tribunal last week approved IIHL’s ₹9,650 crore resolution plan to acquire RCap, following a two-year legal battle by Hinduja Group.
The plan has to be implemented within 90 days of the date of the order (27 February).
However, since certain regulatory approvals were pending in the matter, lenders had urged the Hinduja Group entity to secure the necessary regulatory approvals—from the Insurance Regulatory and Development Authority (Irdai), the Securities and Exchange Board of India (Sebi) and the Competition Commission of India (CCI).
The Reserve Bank of India (RBI) approved RCap’s takeover in November.
“The lenders are concerned that since the clearance on the regulatory approvals may take further time, their payment is likely to take a back seat,” said a counsel on the condition of anonymity. Such approvals can take from three months and a year to get, he added.
The administrator also submitted that errors had crept into the tribunal’s 27 February order, and that it had filed a plea seeking corrections.
NCLT will take up the matter for hearing on 11 February.
Under the Insolvency and Bankruptcy Code, NCLT has the power to correct an order under section 60(5), read with Rule 154 and 11 of NCLT rules, to rectify or correct any inadvertent error in an order.
NCLT’s 27 February order states that Irdai’s approval was required for a change in the control of Reliance General Insurance Co. Ltd, Reliance Health Insurance Co. Ltd and Reliance Nippon Life Insurance Co. The administrator’s plea seeks to rectify it as: “The resolution applicant shall send an application to Irdai for RGIC, RNLIC, and RHICL, for purposes of implementation of the resolution plan. And in connection with the said implementation, any approval required from Irdai upon acceptance of the letter of intent, the administrator and the committee of creditors shall provide assistance in getting such approvals.”