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Srei group cos enter moratorium as NCLT admits insolvency pleas

A two-member bench of the NCLT also appointed Rajneesh Sharma the administrator to run the companies, while admitting two separate petitions filed by RBI for initiation of corporate insolvency resolution process (CIRP) against the two companies.

By: ENS Economic Bureau | New Delhi |
October 10, 2021 3:13:46 am
The insolvency tribunal imposed a moratorium on both the companies and directed its officials to provide all the documents to the administrator during the interim functioning.

Nearly a week after the Reserve Bank of India (RBI) superseded the boards of Srei Infra and Srei Equipment Finance, the Kolkata bench of the National Company Law Tribunal (NCLT) on Friday admitted the two insolvency pleas moved by the banking regulator against the two companies.

A two-member bench of the NCLT also appointed Rajneesh Sharma the administrator to run the companies, while admitting two separate petitions filed by RBI for initiation of corporate insolvency resolution process (CIRP) against the two companies.

The insolvency tribunal imposed a moratorium on both the companies and directed its officials to provide all the documents to the administrator during the interim functioning.

“The Petition bearing filed by the Reserve Bank of India, the Appropriate Regulator, under section 227 of the Code read with rule 5 of the Insolvency & Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 for initiating Corporate Insolvency Resolution Process against Srei Equipment Finance Ltd, is hereby admitted,” the NCLT order said.

It also observed that the RBI, through its notification dated October 4, 2021, superseded the boards of both the companies. “The RBI has proposed the name of Rajneesh Sharma as the Administrator of the Corporate Debtor. He has also filed his written consent to act as such Administrator, which has been placed on record… ,” it added.

Srei Infra and Srei Equipment Finance together owe more than Rs 30,000 crore to banks and financial institutions. On October 4, the RBI superseded the boards of the two firms after governance concerns were raised and the companies defaulted in meeting their payment obligations.

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