Lenders Accuse IIHL of Delaying Reliance Capital Resolution Implementation

Lenders to debt-ridden Reliance Capital Ltd (RCAP) have accused Hinduja Group's IIHL of using delaying tactics, slowing the resolution plan's implementation. IIHL's requirement for DIPP approval is seen as an afterthought, though not a condition set by the NCLT. Approval delays affect the resolution plan finalized on February 27, 2024.

Lenders to the financially troubled Reliance Capital Ltd (RCAP) have accused Hinduja Group's subsidiary, IndusInd International Holdings Ltd (IIHL), of employing delaying tactics that have hindered the implementation of a resolution plan.

Mauritius-based IIHL emerged as the successful bidder for the acquisition of Reliance Capital, with the NCLT Mumbai approving its Rs 9,861-crore resolution plan on February 27, 2024. Sources allege that IIHL's request for approval from the Department of Industrial Policy and Promotion (DIPP) is a post hoc move, not previously stipulated by the NCLT.

The approval process has stalled for 90 days, primarily because some IIHL shareholders are residents of Hong Kong, a region under China's control. According to Press Note 3, investments from entities associated with countries sharing a land border with India require government approval. The NCLT has urged the RBI and DIPP to expedite the approval, as IIHL has pledged full payment pending regulatory clearances and a resolution of the GST component. The next NCLT hearing is set for September 19, 2024.

(With inputs from agencies.)