The Reserve Bank of India (RBI) moved National Company Law Tribunal (NCLT) on Friday to initiate the insolvency proceedings against SREI group companies -- Srei Infrastructure Finance Ltd. (SIFL) and Srei Equipment Finance Ltd. (SEFL).
The central bank took the firms to NCLT's Kolkata bench a day after the Bombay High Court dismissed SREI Group's writ petition against RBI's action to supersede the boards of SIFL and SEFL.
"It is indeed unfortunate for us. Our objective right from the beginning has been resolution, that is the reason we had moved to NCLT last year for payment to all creditors under section 230, which was not considered," said Hemant Kanoria, Founder, SREI Group.
"Subsequently when the administrator was appointed this Monday, we moved to the Bombay High Court primarily so that the investor process could be completed and a resolution is arrived at expeditiously and till that time the IBC proceedings could be stayed. However, as the court did not accept and RBI has moved to NCLT today, so we will fully cooperate with the regulator to arrive at a solution. We have full faith in our country's regulator, government and judiciary that fair justice would be done," he added.
The development is on expected lines as RBI had announced on October 4 that it would undertake appropriate actions to refer the SREI case to the bankruptcy court.
Also Read: SREI Group companies: All about their business, balance sheet, investments The central bank filed two separate petitions before NCLT against the two non-banking financial companies (NBFCs). The matters were heard on Friday by a two-member NCLT bench, which is expected to pass an order this evening. The two petitions were filed by RBI through its counsel Sanjay Ginodia, senior partner of R Ginodia & Co. According to Ginodia, he submitted arguments on behalf of RBI before the NCLT bench on Friday. An order is expected by this evening, Ginodia told PTI. The two entities owe over Rs 30,000 crore to banks and financial institutions. The move comes after the Bombay High Court on October 7 dismissed SREI Group's plea against RBI action on SIFL and SEFL.
Also Read: Srei goes the DHFL way, Amazon and Flipkart rivalry heats up and more on the BT show SREI Group had challenged RBI's decision to supersede the boards of the two firms and initiate insolvency proceedings against them. On October 4, RBI had superseded the board of directors of SIFL and SEFL, owing to governance concerns and defaults by the companies in meeting payment obligations. RBI had said it intended to initiate the process of resolution of the two NBFCs under the Insolvency and Bankruptcy Rules, 2019. It had also said it would apply to the NCLT for appointing an administrator as the insolvency resolution professional.