Torrent Investment seeks refund of ₹75 crore earnest money deposit in Reliance Capital under IBC

Torrent Investment seeks refund of ₹75 crore earnest money deposit in Reliance Capital under IBC

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Between Trusted capitalof the bankruptcy procedure, Torrent Investment requests the return of $75 crore deposited as earnest money deposit (EMD) under the Insolvency and Bankruptcy Code (IBC), sources told CNBC-TV18.

The security deposit or EMD serves as a sign of seriousness and commitment on the part of bidders participating in insolvency proceedings under the IBC. It is a standard procedure in which interested parties deposit a certain sum to express their genuine intention to acquire the distressed asset.

According to sources, Torrent Investment has begun efforts to recover its $75 crores in EMD, which were deposited in connection with the takeover bid of Reliance Capital.

The administrator is examining Torrent's application, although any final decision on the refund is pending the outcome of the Supreme Court hearing. Torrent Investment's plea challenging the second round of auction for the sale of Reliance Capital is pending in the Supreme Court.

The National Company Law Tribunal (NCLT) previously approved Hinduja Group company IndusInd International Holdings (IIHL) made a bid of Rs 9,861 crore for Reliance Capital on February 27. IIHL emerged as the highest bidder to take over the debt-laden conglomerate in the second round of the auction concluded in April 2023.

In November 2021, the Reserve Bank of India (RBI) replaced the board of directors of Reliance Capital due to payment defaults and serious governance issues and requested initiation of a Corporate Insolvency Resolution Process (CIRP) in the Mumbai Tribunal of the NCLT. The request for resolution plans (RFRP) was issued on April 26, 2022 and four resolution applicants (Torrent Investments, IIHL, Cosmea Financial-Piramal Group and Oaktree Capital) submitted their bids.

In October 2023, Torrent Investments Pvt. second auctionas part of your corporate insolvency resolution process.
He legal fight started after Torrent submitted its Rs 8,640 crore bid for RCap, but rival bidder Hinduja Group, through IndusInd reviewed your offer to ₹9,000 crore. Subsequently, the committee of creditors (CIC) proposed an expanded challenge mechanism seeking higher value for the company and in the second round the Hinduja Group emerged as the highest and only bidder.

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