Srei group cos enter moratorium as NCLT admits insolvency pleas

Nearly per week after the Reserve Bank of India (RBI) outdated the boards of Srei Infra and Srei Equipment Finance, the Kolkata bench of the National Company Law Tribunal (NCLT) on Friday admitted the 2 insolvency pleas moved by the banking regulator in opposition to the 2 corporations.
A two-member bench of the NCLT additionally appointed Rajneesh Sharma the administrator to run the businesses, whereas admitting two separate petitions filed by RBI for initiation of company insolvency decision course of (CIRP) in opposition to the 2 corporations.
The insolvency tribunal imposed a moratorium on each the businesses and directed its officers to offer all of the paperwork to the administrator through 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 stated.
It additionally noticed that the RBI, by means of its notification dated October 4, 2021, outdated the boards of each the businesses. “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 collectively owe greater than Rs 30,000 crore to banks and monetary establishments. On October 4, the RBI outdated the boards of the 2 companies after governance considerations had been raised and the businesses defaulted in assembly their cost obligations.