The Committee of Creditors (CoC) of debt-laden Reliance Capital (RCap) wants the tribunal to direct Hinduja Group to deposit the equity component of the bidding amount in an escrow account with them.

According to submissions by Reliance Capital’s (RCap) Committee of Creditors (CoC) before the National Company Law Tribunal (NCLT), an extension to the deadline for completing the resolution process should not be granted until the equity component is deposited into an escrow account. Additionally, stakeholders should be adequately compensated for any payout delays beyond the earlier May 27 deadline.

Hinduja Group, the successful resolution applicant of RCap, had sought a 90-day extension to the earlier deadline of May 27 to complete the process.

Any extension to be granted by the tribunal should be subject to an interest rate not less than the financing cost payable to the financiers, CoC said in its plea.

In case of further delay or non-implementation of the resolution plan beyond the extension date, if granted, it should be subject to forfeiture of bank guarantee and money lying in the escrow account, it added.

The pleas by the CoC come ahead of the June 25 (Tuesday) hearing of the petition filed by IndusInd International Holdings Ltd (IIHL) seeking an extension of the deadline for completing RCap’s resolution process.

IIHL is the firm through which the Hinduja Group – the successful applicant for the debt-laden firm – had placed its bids for RCap, which has been undergoing insolvency since December 6, 2021.

A change in implementation structure proposed by IIHL will need many approvals, it said, adding, IIHL has also applied for approvals from the Department of Industrial Policy and Promotion (DIPP).

“There is no certainty whether regulators will grant such approvals and conditions…,” it said.

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Failure to make upfront payments to stakeholders by May 27, 2024, is a clear default of the terms by IIHL. At the monitoring committee meeting on April 30, IIHL had maintained that the implementation of the plan would take place on or before the May deadline, it added.

Earlier, the Hinduja Group had proposed to change the holding structure of the firms through which it intends to take over RCap through the insolvency process. IIHL has proposed including four new firms — Cyqure India Pvt Ltd, Ecopolis Properties Pvt Ltd, Cyqurex Technologies Pvt Ltd and IIHL BFSI Holding Ltd – as part of the transaction.