The Kolkata Bench of the National Company Law Tribunal (NCLT) on Friday gave its approval to start insolvency proceedings against Srei Infrastructure Finance and its wholly owned subsidiary Srei Equipment Finance, after the Reserve Bank of India had filed insolvency applications against the two companies.
The central bank filed the insolvency petitions on Thursday just after the Bombay High Court dismissed a writ petition filed by two promoters of SREI group challenging the RBI’s decision to supersede the boards of these companies and initiate insolvency proceedings against them.
The applications filed by the RBI were taken up by a Bench of Justices Rajasekhar VK and Harish Chander Suri of the NCLT, Kolkata, on Friday. Rajneesh Sharma has been appointed the administrator of the companies.
On a request made by UCO Bank, the RBI filed the applications for initiation of the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code through Sanjay Ginodia, senior partner of R. Ginodia & Co.
Citing governance concerns and defaults by the two NBFCs in meeting their various payment obligations, the RBI on Monday superseded their boards and appointed Rajneesh Sharma, former chief general manager, Bank of Baroda, as the administrator of the companies. It has also constituted a three-member advisory committee to assist the administrator in discharging his duties.
Commenting on the RBI moving the NCLT, Hemant Kanoria, founder, SREI Group, said, “It is indeed unfortunate for us. Our objective right from the beginning has been resolution, that is the reason we had moved to the NCLT last year for payment to all creditors under Section 230, which was not considered.”
“Subsequently, when the administrator was appointed this Monday, we moved to the Bombay High Court primarily so that the investor process could be completed and a resolution is arrived at expeditiously, and till that time the IBC proceedings could be stayed. However, as the court did not accept and RBI has moved to NCLT today, we will fully cooperate with the regulator to arrive at a solution. We have full faith in our country’s regulator, government and judiciary that fair justice would be done,” Kanoria said.