NEW DELHI: The Reserve Bank of India (RBI) on Friday, October 8, 2021, filed an application for initiation of corporate insolvency resolution process against Srei Infrastructure Finance Limited and Srei Equipment Finance Limited at the Kolkata Bench of the National Company Law Tribunal (NCLT).
This is the second financial service provider (FSP) which has been referred to NCLT by the RBI for the insolvency process. DHFL was the first to have undergone the process. Under the insolvency law, an application against a financial institution can only be filed by the RBI on behalf of the creditors.
With the insolvency application now filed with NCLT, an interim moratorium will commence on and from the date of filing of the application till its admission or rejection. A moratorium means no legal proceedings can be initiated or any existing proceedings can continue against either of the two Srei Group companies. The two firms cannot transfer, encumber, alienate or dispose off any of their assets or any legal right or beneficial interest therein during the moratorium period.
On Monday the RBI had superseded the board of directors of Srei Infrastructure Finance Ltd and Srei Equipment Finance Limited over governance issues and defaults. It had also appointed a panel to advise the administrator of SIFL and SEFL.
The members of the advisory panel include R Subramaniakumar, former MD & CEO, Indian Overseas Bank, TT Srinivasaraghavan, former Managing Director, Sundaram Finance, and Farokh N Subedar, former COO and Company Secretary, Tata Sons Limited. Rajneesh Sharma, ex-Chief General Manager, Bank of Baroda, has been appointed as the administrator.