Torrent Group claimed on Tuesday that the challenge mechanism in the Reliance Capital IBC case has been broken by the Committee of Creditors (CoC) and that there is no guarantee that the second auction will be the last.
Torrent Group said on Tuesday that the challenge mechanism in the Reliance Capital Insolvency and Bankruptcy Code (IBC) case has been dismantled by the Creditors Committee (CoC) and that there is no guarantee that the second auction will be the last and the process will not go on forever.
Mukul Rohatgi, appearing on behalf of Torrent, told a hearing at the National Company Law Tribunal (NCLT) that the January 19 deadline is approaching when the lender's committee wants to start a new challenge process and that this The latter wants to circumvent the court's provisional January 3 deadline. order and start auctions again.
During Tuesday's hearing, Torrent told the court in round 3 of the first auction that Hinduja submitted its offer of Rs 8,110 crore, below the threshold of Rs 8,550 crore, while Torrent's bid in this round was of Rs 8,550 crore. As per the rules, Hinduja missed the limit in round 3 of the first auction, while Torrent moved to round 4 and improved the bid to Rs 8,640 crore, Rohatgi told NCLT.
โThe Committee of Creditors (CoC) falsely claimed that our offer had some deficiency and therefore, to avoid any discrepancy, we offered the full amount of Rs 8,640 crore as initial cashโฆ Our assertion is that there can be no an infinite wisdom of CoC. It is limited to one thing under Reg 39 1Aa, which allows only one change," the company argued.
Torrent added that Reliance Capital Administrator support to hold a second auction with a base bid set at Rs 9,500 crore, down from the liquidation value of Rs 12,000-13,000 crore.
Rohatgi argued that there is now a law that offers below the liquidation value are not eligible, adding that it is clear that the Administrator and the CoC were doing their best to give another party a chance once the process was finished. He reiterated that NCLT's Jan. 3 interim order was clear that no new offers would be considered, something the CoC wants to circumvent.
Darius Khambata, also representing Torrent, said the CoC minutes show that the challenge mechanism was concluded and carried out in a fair and transparent manner, with Torrent as the highest bidder, and Regulation 39 1Aa binds all parts; therefore, a second auction is against the law.
"How can CoC say that Torrent's offer was suboptimal when it was above the threshold they set themselves?" he said.
"There is no precedent since Reg 39 1Aa was introduced to allow for another round of auctions after the conclusion of the first... There is no doubt that the Administrator himself is very clear in the minutes of the CoC meetings that the review of Hinduja is illegal," he said during the hearing.
The CoC had not yet presented its arguments to the NCLT.
