NCLT refuses stay on Religare Enterprises investment in Religare Capital Markets
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New Delhi: The National Company Law Tribunal (NCLT) on Friday refused to stay a Religare Enterprises Ltd (REL) board resolution to invest up to Rs500 crore in Religare Capital Markets (RCM) Ltd.
Mauritius-based India Horizon Fund (IHF), supported by IDBI Trusteeship, representing a combined shareholding of 11% in REL, had sought a stay on the proposed investment.
The proposal to invest money in RCM was made in an ordinary resolution through postal ballot in July.
RCM was to pass on the proceeds of the investment to its foreign subsidiary Religare Capital Markets International (Mauritius) Ltd. to return loans owed by it to Axis Bank Ltd.
IHF sought the ouster of the company’s board for alleged mismanagement and oppression of minority shareholders. It sought the appointment of an administrator until a new board can be set up.
The petition cited “irrational and fraudulent management of funds of the company by the promoters and the board of directors and frequent and unexplained write-offs by the company and its subsidiaries“.
NCLT has sought response on these allegations from REL and Malvinder and Shivinder Singh within 4 weeks.
The matter has been posted for further hearing on 7 November.