Credit Suisse Group AG, a financial creditor to Reliance Capital (RCap), wants the former Anil Ambani group firm’s insolvency process to be put on hold till its claims are settled. The company had earlier moved the bankruptcy court seeking Rs 660 crore of dues, after the resolution professional rejected it.In a legal notice sent to RCap’s administrator, the Swiss bank said as the case is pending before the National Company Law Tribunal’s Mumbai bench, it should not proceed with the resolution process, “much less its finalisation”.Credit Suisse’s Mumbai branch is also the onshore security trustee acting on behalf of the bank’s Singapore branch, Federal Bank and Far Eastern International Bank. The letter, dated May 3, was sent to RCap administrator Nageswara Rao Y by legal firm Juris Corp on behalf of Credit Suisse.
The claim (of Rs 660 crore as of December 6, 2021) was rejected by administrator in a letter dated February 24, 2022, following which Credit Suisse challenged it before the NCLT.“Furthermore, our client is admittedly a secured creditor against the first ranking pari passu (equal footing) pledge validity created over the corporate debtor’s entire shareholding held in Reliance General Insurance Company (RGICL) in favour of IDBI Trusteeship Services acting as trustee, security agent for the secured parties (including our client) as defined in the restated pledge agreement,” the letter said.
Given the pendency of the claim rejection, and the decision awaited in RGICL custody, the Swiss bank wanted the committee of creditors (CoC) not to proceed with the resolution plan as it would be utter breach of Corporate Insolvency Resolution Process (CIRP).The NCLT’s claim will also have a bearing on the constitution of the CoC, consequent voting rights vis-à-vis the approval of the resolution plan and distribution of the proceeds, among others, it added.Approval of any resolution plan would not only be bad in law but “travesty of justice” and go against the intent of the Insolvency and Bankruptcy Code, the letter said, adding that a decision on the resolution plan should be taken only after the NCLT’s decision.
Earlier on April 26, the Hinduja Group quoted Rs 9,650 crore for RCap, with it offering the entire amount in upfront cash, as other bidders stayed away from the second e-auction. The bid amount was much lower than the bankrupt firm’s liquidation value of Rs 13,000 crore. Hinduja Group, which placed its bids through a group firm IndusInd International Holdings (IIHL), has assured there will be no deferred payment.
