SREI
RBI moves NCLT to start insolvency proceedings against SREI group firms
Kolkata/IBNS: The Reserve Bank of India (RBI) has petitioned the National Company Law Tribunal (NCLT) to start insolvency proceedings against SREI group firms, media reports said quoting sources.
Two persons familiar with the development told Money Control about the development on the conditions of anonymity.
On October 4, the central bank announced the takeover of the boards of directors of SREI Infra and SREI Equipment Finance Limited over governance concerns and debt repayment by SREI Group companies.
The SREI group promoters challenged RBI's move against SREI Infrastructure Finance Ltd (SIFL) and SREI Equipment Finance Ltd (SEFL) and get a stay order against the insolvency procedures.
SREI Group promoters, Adisri commercial private ltd, had filed a writ petition in Bombay high court against the RBI action, the report said.
Adisri is the holding company of SREI and has 60.36 percent stake in SREI Infrastructure Finance Ltd.
On October 7, Bombay High Court dismissed SREI Group's plea against the Reserve Bank of India's (RBI) action on SREI Infrastructure Finance Ltd (SIFL) and SREI Equipment Finance Ltd (SEFL).
RBI also appointed Rajneesh Sharma, the former Chief General Manager at Bank of Baroda, as administrator.
The RBI announced its decision a week after SREI Group creditors refused to accept the management’s proposal to grant a one-year standstill from any action—legal or otherwise—to ger back dues estimated at around Rs 30,000 crore, the report stated.
SREI Group said it submitted a proposal to pay the full amount to banks under a scheme filed under Section 230 of the Companies Act 2013 in October 2020, the report added.
The banks neither accepted it nor proposed a payment schedule acceptable to them, the company said in a statement, it added.
"Banks have been controlling the company's cash flow since November 2020. Almost Rs 3,000 crore has been collected by them, out of which they have been disbursing to themselves," the group said in a statement.
Over the last three decades, SREI has already paid Rs 30,000 crore as interest and another Rs 20,000 crore principal to banks, the company said.
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