Lenders of debt-laden Reliance Capital Limited (RCAP) have alleged that Hinduja Group company IIHL is adopting delaying tactics due to which the implementation of the resolution plan is also being delayed. On the other hand, Hinduja Group company refuted the allegations and said it is following proper procedure. Mauritius-based IndusInd International Holdings Limited (IIHL) has emerged as the successful bidder for the takeover of Reliance Capital.
This is a question of so much money
The Mumbai bench of NCLT had on February 27, 2024, approved IIHL’s Rs 9,861 crore resolution plan for the debt-ridden financial firm. According to the report, the lender claimed that IIHL took the step of getting approval from the Department of Industrial Policy and Promotion (DIPP) later. It said that this was not even part of the conditions laid down by NCLT while approving the resolution plan on February 27, 2024.
According to sources, it has been 90 days since the IIDH submitted its application to the DIPP, but approval is still pending. IIDH sources said that all the allegations are completely false, baseless and an attempt to defame and disrupt the resolution process.
There is no reason for IIHL to delay the implementation of the plan, especially when IIHL has already deposited Rs 2,750 crore in the CoC. He said that contrary to the allegations, IIHL is interested in taking over the company and completing the resolution plan at the earliest, so that the daily erosion of value can be stopped.
Why is this approval necessary?
The DIPP approval is necessary because some of IIHL’s shareholders are residents of Hong Kong, a special administrative region controlled by China. According to Press Note 3, if any entity, citizen or permanent resident of any country sharing a land border with India (China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan) invests in India, they will need to obtain permission from the government and will need to apply for approval.
