Hinduja Group Faces NCLAT Heat: Reliance Capital Lenders Demand Interest on IIHL Payment Delay

Mumbai: The secured lenders of Reliance Capital have approached the National Company Law Appellate Tribunal (NCLAT) to seek modifications to a previous tribunal order concerning delayed payments by IndusInd International Holdings (IIHL), a Hinduja Group company. The lenders are requesting that interest be included on the delayed payment amount.

CoC Seeks Modification of Tribunal Order

The committee of creditors (CoC) of Reliance Capital is also asking the NCLAT to modify the lower tribunal’s order, allowing them to forfeit ₹2,750 crore in case the Hinduja Group company defaults. This sum has already been deposited by IIHL into the CoC’s designated account.

Lenders Challenge NCLT’s Extension Approval

The lenders’ actions come after the Mumbai bench of the National Company Law Tribunal (NCLT) allowed the successful bidder, IIHL, to extend the timeline for implementing the resolution plan in July. However, the CoC argues that the NCLT should not have granted this extension without ensuring adequate compensation for the CoC through interest payments. They believe that the interest rate should not be lower than the effective yield payable to IIHL’s financiers.

CoC Requests 16.65% Interest on Delayed Payment

In their petition, the CoC has asked the NCLAT to direct the Hinduja Group entity to pay interest at a rate of 16.65% on the full amount from May 27 to August 8, 2024.

Awaiting Responses from CoC and IIHL

Both the CoC and IIHL did not respond to email queries before the publication deadline. On July 23, the NCLT directed IIHL to deposit an equity amount of ₹2,750 crore into an escrow account by July 31. Additionally, the tribunal clarified that the Hinduja-owned company must submit binding executed term sheets for a loan amount of ₹7,300 crore to the monitoring committee overseeing the acquisition of Reliance Capital through the bankruptcy process.