Shortly before the pandemic in 2020, Anil Ambani told a UK court that he was broke, while his firm Reliance Capital owed Rs 40,000 crore in loans. Almost two years later, insolvency proceedings against the company were initiated in December 2021, to be wrapped up by June 2022.
After several delays and a winning bid by Torrent, the Supreme Court has refused to stop a fresh auction for Reliance Capital.
Turned away by NCLT, accepted by NCLAT
The apex court has upheld an order by the National Company Law Appellate Tribunal, which cleared the way for fresh bids.
The decision had come after the National Company Law Tribunal had delayed a new auction by the Committee of Creditors.
They called for another bidding process after viewing Ahmedabad-based Torrent Group's bid as non-compliant.
New auction following higher bids?
Creditors argued that the highest net present value for Reliance Capital in Torrent's draft resolution and the actual bid amount didn't match.
The decision for another e-auction came as the Hindujas offered Rs 1,000 crore more than Torrent, after the bidding process had ended.
Being the largest bidder, Torrent opposed the CoC's decision and got it delayed in the NCLT.
Funds locked in blocked resolutions
Reliance Capital's resolution has once again been delayed, and is among several big ticket insolvency cases, which will miss the March 2023 deadline.
This delay of bankruptcy resolutions will lead to a blockage of Rs 1 lakh crore in funds. Apart from RCap, the auction for Reliance Communications is also stuck due to litigation.
