Debt-laden Reliance Capital’s (RCap) administrator was only a facilitator to get the maximum value for the assets through the insolvency process and did not violate any injunctions, its counsel told the bankruptcy court on Tuesday.
The counsel also said there was no dereliction of duty on the administrator’s part in scheduling a second round of challenge mechanism.
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The National Company Law Tribunal (NCLT) is hearing a petition filed by Torrent Group to stop the second round of challenge mechanism and another one on a revised bidding by Hinduja Group.
On Monday, Mukul Rohatgi appearing for Torrent Group, a bidder for the entire assets of the former Anil Ambani group firm, alleged that the lenders’ plans for fresh auctions was against the tribunal’s orders. Further, there was also no guarantee that the second auction could be the last.
IndusInd International Holdings (IIHL), a group company through which the Hindujas had placed bids for the former Anil Ambani group firm, had also sought to be made a party in the plea filed by Torrent Group.
“While the process note states that no change in financial proposal post the completion of the process would be permitted, there are judicial precedents whereby the committee of creditors (CoC) have accepted higher bids. The courts have also allowed CoC to accept such bids, and all compliant plans are required to be put to vote,” senior advocate Ravi Kadam said in his argument before the NCLT’s Mumbai Bench.
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Kadam, appearing on behalf of the administrator, said the CoC should “deliberate” on the matter, in case of any deviation in the financial proposal received after the conclusion of challenge mechanism.
“In the general interest of all creditors, it is his duty to get maximum value. The challenge mechanism is a collaborative process and it’s not to be a unilateral decision by the administrator,” he said, adding the determination of the net present value (NPV) by the CoC will be final and binding. The tribunal will continue to hear the case on Wednesday. RCap’s lenders had proposed to hold the second round of challenge mechanism, targeting more than Rs 10,000 crore of proceeds from the insolvency process, on January 19.