Credit Suisse asks CoC not to approve Reliance Capital resolution plan

Switzerland-based Credit Suisse has asked the Administrator in the Reliance Capital corporate insolvency resolution process (CIRP) to not proceed with any discussion on resolution plan and approval of the same pending legal challenges in the Mumbai bench of the NCLT.  

Credit Suisse has written a letter the Administrator – Nageswara Rao — that its debt of Rs 660 crore, which had been claimed by it as a financial creditor, was rejected by the Administrator. This has been challenged by it in the NCLT Mumbai and the matter is still pending.

Credit Suisse has further claimed that it is a secured creditor as it has pledge created over Reliance Capital’s entire shareholding in Reliance General Insurance. IDBI Trusteeship Services holds these shares on its behalf, in the capacity of trustee/security agent.

The Switzerland-based bank has said that the NCLT verdict on the pending hearing will have a direct bearing on the case as a decision in its favour would change the constitution of the Committee of Creditors.

It, therefore, said that the present CoC has no right to take a final decision on the resolution plan. It also claimed that finalisation of the resolution plan pending its petition in NCLT would be violation of the Regulation 38 of the CIRP rules.

Hinduja Group firm IIHL emerged as the winner with Rs 9,650 crore bid in the second round of auctions for Reliance Capital.

IIHL was the sole bidder in the second round of auction of Reliance Capital, as Torrent Investment and Oaktree decided to stay away from the auction.

In addition to the Rs 9650-crore bid, the IIHL has also offered Rs 300 crores capital infusion into the Reliance General Insurance, and another Rs 50 crores for future recovery from preferential, undervalued, fraudulent and extortionate (PUFE) transactions. This takes the total value of IIHL’s bid to Rs. 10,000 crores.  The entire bid amount will be paid upfront in cash.

The CoC will have to approve the resolution plan, before the administrator send it to the NCLT for its final approval.

Also Read: Hindujas emerge highest bidder with Rs 9,650 crore bid for Reliance Capital