Around 20,000 investors of the Anil Ambani-owned Reliance Home Finance Ltd (RHFL) plan to initiate recovery proceedings at the National Company Law Tribunal (NCLT) after the company defaulted in bond repayments recently.
IDBI Trusteeship, which represents RHFL’s non-convertible debenture (NCD) holders, has appointed Shardul Amarchand Mangaldas as its legal adviser.
IDBI Trusteeship, which represents investors, is also exploring the option of filing a case with the Debt Recovery Tribunal (DRT) to recover their money.
However, an NCLT application under the Companies Act seems more likely, especially since a forensic accounting report allegedly seems to indicate deviations from the Act.
Also, if the IDBI Trusteeship, which represents RHFL’s bond investors, decides to file a case under the Insolvency and Bankruptcy Code (IBC), it may have to approach the Reserve Bank of India (RBI), though such a move is not under consideration, at least at the moment.
This is because a fresh amendment related to financial services companies (Section 227 of IBC) is applicable only when the administrator (RBI) refers any such company to the NCLT, according to legal experts.