The Hinduja group has not deposited funds to acquire Reliance Capital (RCap) in the designated accounts of the lenders despite making the highest offer, which is a “contempt of the court”, the administrator of the debt-ridden firm informed the National Company Law Tribunal (NCLT).
The tussle between the Hinduja group and the lenders has led to a delay in the resolution of the RCap acquisition, which was sent to the bankruptcy court in December 2021 after it failed to repay debt worth Rs 25,000 crore.
The Hinduja group firm, IndusInd International Holdings (IIHL), acquired the company in December 2023 with an offer of Rs 9,651 crore. Of this, IIHL was to pay Rs 2,750 crore as equity and planned to raise the rest as debt to be paid to lenders.
After the highest bid made by IIHL, the debt resolution is mired in litigation at the NCLT with a separate petition pending in the Supreme Court.
In its affidavit, the administrator said IIHL has failed to meet the conditions set by the court to justify the extension until August 10 for the implementation of the RCap resolution, thus violating the court’s July 23 order.
The affidavit by the administrator said that instead of depositing Rs 2,750 crore in the CoC’s designated escrow accounts in India and offshore, as mandated by the court, the company has deposited the money in its own accounts as well as in the promoters’ accounts.
“Further, IIHL was constrained to approach the NCLT seeking clarification of the order of July 23, and in the interim, awaiting clarity and hearing of the application, in complete bona fide and in full interest to close the transaction at the earliest, deposited the monies in its respective accounts. There is neither any default nor any contempt by IIHL to comply with its obligations as directed by the NCLT. The application and the affidavit, specifically among other aspects (which need action from the administrator and the committee of creditors and are yet to be initiated), seek clarity from the NCLT in this regard. IIHL, therefore, vehemently denies that there has been any contempt of the NCLT order as alleged by the administrator in its submissions before the NCLT and reported in the media. IIHL once again confirms its commitment towards the implementation of the resolution plan at the earliest no sooner on receipt of clarity from the Hon’ble NCLT and completion of necessary actions under the resolution plan by all stakeholders,” the statement said.
According to the administrator’s affidavit, a sum of Rs 250 crore, which was to be deposited in the CoC’s escrow account in India, was deposited in the accounts of Harsha Ashok Hinduja, Shom Ashok Hinduja, and Ashok P Hinduja – the promoters of the Hinduja group.
Similarly, another Rs 2,500 crore was deposited in IIHL’s accounts with the Standard Chartered Bank, Mauritius, and the State Bank of Mauritius.
The NCLT, in its July 23 order, directed IIHL to deposit Rs 2,500 crore in the offshore escrow account of the CoC by July 31.
The administrator informed the court that the CoC’s escrow accounts were opened in advance and the details were shared with the IIHL on July 27. The IIHL, however, failed to deposit the money in the CoC-designated escrow accounts.
IIHL has also failed to provide the details of the binding term sheets for raising Rs 7,300 crore debt, to the monitoring committee, the administrator added.
In fact, none of the conditions have been complied with and the applicant is in contempt of the court’s order, as per the administrator.
The administrator has also accused the IIHL of ignoring his mails and informed the court that after the July 23 order, IIHL did not respond to him for 8 days, despite him following up with the company on a daily basis.
Calling IIHL’s conduct contumacious and contradictory, the administrator said the company has filed a modification application on the basis that the conditions laid down in the July 23 order could not be complied with, and has also filed the compliance affidavit showing compliance with the court’s directions.
The applicant cannot be allowed to blow hot and cold at the same time, the affidavit said.
The administrator has appealed to the court that the interlocutory application filed by IIHL seeking modifications in the July 23 order is nothing but a delaying tactic, and should be rejected.
The hearing on IIHL’s plea at NCLT is scheduled for next week.
First Published: Aug 04 2024 | 4:21 PM IST
