Torrent Investment on Tuesday urged the National Company Law Tribunal (NCLT) to quash the lenders' plans to hold a fresh auction for the takeover of the Anil Ambani-promoted Reliance Capital.
Darius Khambata, representing Torrent Investments, in a plea said the Committee of Creditors have been saying that the 'challenge mechanism' or the fresh round of auction is a continuing process of the last round.
"We find the minutes of the CoC meeting and the facts put before the tribunal are false... We request the NCLT to consider the fresh round of auction ending on January 19 as infructuous," he added.
If this 'challenge mechanism' is accepted, there will be no finality and the CoC will announce a fresh round of auction every month increasing the threshold, Mukul Rohatagi (also representing Torrent Investment) said.
"If this plea for a fresh bid is accepted, there will be no finality to the process and they will do it every month.... The threshold for the new 'challenge mechanism' is Rs 9,500 crore and every month Rs 50 crore or more could be added to it.. My submission is that the fresh bid ending on January 19 should be quashed," he added.
Ravi Kadam, representing the administrator, in his reply stated that there was no violation of the NCLT injunction.
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"It is permissible for the CoC to negotiate with the resolution applicants if the lenders are dissatisfied with the plan. It is the duty of the CoC for value maximisation. It is an ongoing process and is a collaborative decision between the administrator and the CoC. I am not in breach of law nor have I abdicated my duty as an administrator," Kadam stated.
The tribunal, headed by Pradeep Narhari Deshmukh and Shyam Babu Gautam, adjourned the matter for further hearing on January 18.
Reliance Capital has a consolidated debt of about Rs 40,000 crore.
The Reserve Bank (RBI) had applied to initiate Corporate Insolvency Resolution Process (CIRP) against the Reliance Group company at NCLT Mumbai bench.
Subsidiaries of Reliance Capital that are pushed for insolvency resolution are - Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance, and Reliance Commercial Finance.
RBI-appointed Nageswara Rao Y is the administrator of Reliance Capital's insolvency process.
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