The fracas between the Hinduja group and the lenders has led to a delay in the debt resolution of Reliance Capital, which was sent to court in December 2021 after it failed to repay its debt worth Rs 25,000 crore. The Hinduja group firm IIHL had won the race to acquire 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 was planning to raise the rest as debt to be paid to the lenders. Post 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 Reliance Capital resolution, thus violating the court’s July 23 order.
The affidavit by the administrator said 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.
The Hinduja group has countered the stand taken by the lenders and the administrator, saying there is no “escrow account” and the accounts opened by the CoC are not supervised by an independent trustee. “The escrow accounts opened by CoC are nothing but a unilaterally owned bank account which cannot be called an escrow account as it does not satisfy any of the conditions required for opening an escrow account which is a bilateral/joint effort,” an IIHL source said.
As per 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 own accounts with the Standard Chartered Bank, Mauritius and State Bank of Mauritius. The NCLT, in its July 23 order, had directed IIHL to deposit Rs 2,500 crore in the offshore escrow account of the CoC by July 31.
The administrator has informed the court that CoC’s escrow accounts were opened well in advance and the details of the same were shared with the IIHL on July 27, but despite that, IIHL 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 said.
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
