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Reliance Home Finance’s bondholders has approached NCLT

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Reliance

Reliance Home Finance (RHFL), part of Reliance Capital, is likely to face legal action, including recovery proceedings in the National Company Law Tribunal (NCLT) as the Anil Ambani Group’s mortgage finance arm reportedly defaulted on bond repayments due earlier this month.

Debt investors are actively considering filing a case in either the NCLT or Debt Recovery Tribunal (DRT) to recover their money. Several news reports earlier mentioned that the embattled company has dues of Rs 91.78 crore, includes both principal and the interest, to around 20,000 retail bondholders but is unable to pay due to a cap placed by the lenders as it is undergoing is a bank-led resolution process.

IDBI Trusteeship, which is representing the interests of RHFL’s non-convertible debenture (NCD) holders, has roped in Shardul Amarchand Mangaldas as the legal adviser for the affected investors. “The legal firm has conducted a conference call with investors and has already prepared an application draft on behalf of the investors,”.

The financial daily quoted an unnamed Reliance Capital spokesperson as saying that RHFL has adequate assets to honour repayment claims from its bond buyers. “Reliance Home Finance has good quality retail assets and close to Rs 500 crore, (with) which it wants to pay retail investors, but is unable to proceed with such payments owing to the complete restraint placed by the banks, led by the lead lender, on making any preferential payments,” he told the daily.

Responding to a query from the business daily, the company spokesperson said: “On the issue of trustees calling for full loan repayment, we have already called for a debenture holders’ meeting and will be sharing the resolution plan as one of the agenda items.

The publication quoted a person aware of the development as saying that using the Insolvency and Bankruptcy Code (IBC) is not under consideration at present. The Centre has authorised the Reserve Bank of India (RBI) to refer any financial services company for insolvency proceedings.

Anil Goel, the founder of AAA Insolvency, told ET: “The new amendment related to financial services companies (Sec 227 of IBC) is applicable only when the administrator (RBI ) refers any such company to NCLT. If a trustee wants to take a company to NCLT acting on behalf of investors, it has to first approach the RBI.”

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