Torrent Investments has taken the legal dispute regarding its offer for Reliance Capital to the Reserve Bank of India (RBI) and has asked the RBI to give instructions to the manager.
The Creditors' Committee will meet on January 3 to assess the latest developments in the case.
On December 28, Torrent Investments wrote to RBI Deputy Governor M. Rajeshwar Rao requesting instructions on Nageswara Rao Y, the manager of Reliance Capital.
According to the letter, the competition came to a close on December 21 with the administrator's email to Torrent Investments confirming its NPV bid amount of Rs 8,640 crore as the highest bid amount.
However, Torrent Investments was informed that Hinduja Group, a rival settlement applicant, had late submitted a revised financial proposal on December 22 following the conclusion of the challenge proceedings on December 21 and after learning that Torrent Investments had won the auction. According to earlier press reports, Hinduja's offer of Rs 9 billion in cash upfront beats Torrent's offer of just Rs 4 billion in cash, with the remaining amount to be paid to lenders in three equal installments over the course of the years 3/4/5 at a zero interest rate.
Maximizing value to creditors is the goal of the IBC Code. Since the CoC will worry about any degradation of current security, Hinduja's offering is preferable for execution compared to Torrent because it has no demand for shared security.
In repeated Supreme Court rulings, it has been held that value maximization is a crucial consideration in the approval of any plan by the CoC.
Only DHFL, which was won by Piramal Group, was settled on behalf of a financial services company under the special authority of RBI Section 227.
In this situation, CoC admitted Adani Group, which was not even a resolution applicant, because it provided the highest value for Piramal's proposal.
