NCLT Orders Hinduja’s IIHL to Deposit ₹2,750 Cr in Escrow for Reliance Capital Resolution

The bankruptcy court in Mumbai has ordered IndusInd International Holdings (IIHL), owned by the Hinduja group, to deposit Rs 2,750 crore into an escrow account by July 31. IIHL won the bid for Reliance Capital (RCL), which is undergoing bankruptcy proceedings. The court has given IIHL an extension until August 10 to complete the necessary formalities to implement the resolution plan.

Tribunal’s Order

The tribunal’s order requires IIHL to deposit Rs 250 crore in an escrow account in India, designated by the Committee of Creditors (CoC), and Rs 2,500 crore in an offshore escrow account, designated by the lenders. IIHL requested more time due to pending regulatory approvals and compliance requirements.

The tribunal allowed the extension but stated that IIHL must submit copies of the binding term sheets for a Rs 7,300 crore loan to the monitoring committee. This loan is part of the acquisition process for Reliance Capital.

The tribunal also noted that any cash generated during the extended period would go to the Committee of Creditors. If there is a default, the CoC can restart the resolution process, inviting all previous applicants to participate in a fresh bidding round.

On February 27, the tribunal approved IIHL’s Rs 9,650 crore resolution plan for Reliance Capital, which is owned by Anil Ambani. As of June 8, 2023, the administrator has acknowledged Rs 25,345 crore in claims from lenders.

Additionally, the Torrent Group has challenged the approval of IIHL’s resolution plan at the Supreme Court after their application was rejected by both the tribunal and appellate tribunal. The case is currently pending at the Supreme Court.