Implementation of RCap resolution plan by 31 March deadline untenable: IIHL

IndusInd International Holdings, part of the Hinduja Group, on Thursday said that implementation of the resolution plan for bankrupt Reliance Capital by 31 March is untenable. 

“You are cognizant of the fact that implementation of the resolution plan in totality, especially of the size and scale of Reliance Capital Ltd in less than one month and 10 days (from the date of the order which was 27 February), is not only untenable and impractical, but unimaginable,” IndusInd International Holdings Ltd (IIHL) has said in a letter to the administrator of Reliance Capital.

Mint has seen a copy of the letter.

On 13 March, the National Company Law Tribunal (NCLT) asked IIHL to implement the resolution plan by 31 March, and complete payment for the takeover in accordance with the resolution plan by 28 May.

“This has been explained, and clarified at multiple occasions and despite that, you have consciously chosen to include this aspect as an agenda item for the second meeting of the monitoring committee," the letter said, adding that the date of 31 March as the implementation date was misconstrued and misunderstood by the committee of lenders.

Nonetheless, IIHL affirmed its commitment to adhering to the NCLT's order and fulfilling the resolution plan within the prescribed timelines. 

The letter urged stakeholders, including the administrator, to collaborate promptly and efficiently to secure the remaining approvals from authorities, including the Insurance Regulatory and Development Authority of India.

On 27 February, the NCLT gave its nod to IIHL to take over the debt-laden Reliance Capital under the corporate insolvency resolution process of the Insolvency and Bankruptcy Code, 2016. 

The Hinduja entity's final resolution plan was worth ₹9,650 crore and was approved by a majority of lenders.

The plan has to be implemented within 90 days of the date of the order.

Sonal Alagh, Alagh & Kapoor Law Offices, said, “The NCLT, a judicial authority established to resolve civil corporate disputes/insolvencies, holds the power to enforce resolution plans approved under the Insolvency and Bankruptcy Code (IBC). With respect to the implementation of the plan, the primary concern for the tribunal will be to balance the interests of all stakeholders involved, including the debtor company, its creditors, and the resolution applicant, in this case, IIHL."