IIHL Deposits Rs.2,750 Crore for Reliance Capital, Meets NCLT Deadline

IndusInd International Holdings Limited (IIHL) has recently announced that it deposited Rs.2,750 crore into the escrow account designated by the Committee of Creditors (CoC) and Vistra. This deposit was made a day before the August 10 deadline set by the National Company Law Tribunal (NCLT).

It was important for the ongoing insolvency resolution of Reliance Capital. On August 8, the NCLT had ordered IIHL to transfer the funds within 48 hours, following concerns raised by Reliance Capital.

NCLT’s Orders & Compliance

The NCLT’s order also required IIHL to submit a term sheet for Rs.7,300 crore in additional funding by 4 p.m. on August 8,2024. IIHL complied with this requirement by submitting the necessary documentation to the Monitoring Committee. This term sheet will be important to support the resolution plan for Reliance Capital, which is valued at Rs.9,650 crore under the Insolvency and Bankruptcy Code.

Controversy & Accusations

The bid by IIHL for Reliance Capital has not been without controversy. Nageswara Rao Y, the Administrator of Reliance Capital, filed an affidavit accusing IIHL of non-compliance with a previous NCLT order. The affidavit alleged that IIHL had diverted Rs.250 crore to its promoters and another Rs.2,500 crore into its accounts, instead of transferring the funds to the designated CoC escrow account.

IIHL defended its actions by stating that it was waiting for the necessary escrow account details from the CoC and acted in good faith.

Conclusion: In conclusion, NCLT’s order had extended the deadline for the Reliance Capital resolution plan to August 10, making IIHL’s Rs.2,750 crore deposit critical towards fulfilling its obligations. With the submission of the term sheet for Rs.7,300 crore in funding, IIHL has now met the requirements set by the NCLT, allowing the resolution process to proceed.

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