Corporate Grapevine

Published: Apr 15, 2022
Updated: Apr 15, 2022

Bankruptcy law is lender’s agony

The sale of Anil Ambani group Reliance Capital is assets is headed for disaster. Just like with Reliance Communications and Reliance Naval and Engineering, the lenders will end up the biggest losers.

The sale of Reliance Capital assets is now facing a legal challenge from Zurich-based Credit Suisse and Axis Bank which have dragged Reliance Capital and its Administrator to the courts.

Credit Suisse, with a claim of approximately Rs 660 crore, and Axis Bank, with a claim of approximately Rs 100 crore, have filed applications before NCLT, Mumbai against the Administrator of Reliance Capital.

As per the applications, these lenders have sought recognition of their claims as financial creditors of Reliance Capital, and inclusion in the Committee of Creditors as a part of corporate insolvency resolution proceedings of Reliance Capital.

The claims of Credit Suisse and Axis Bank were previously disregarded by the Administrator of Reliance Capital.

The next date of hearing in these matters is in the second week of May. And whatever be the judgement, the aggrieved party are sure to move NCLAT and then the Supreme Court.

It is certainly not going to be an easy task for the lenders, as the bankruptcy law, once touted as a silver bullet to solve India’s bad debt problem, has now become a big joke.