Torrent Investments has escalated the legal war for Reliance Capital bid to the Reserve Bank of India (RBI) asking it to issue directions to the administrator.
The Committee of Creditors will meet on January 3 to take a view on the new twist in the case.
In a new letter to RBI Deputy Governor M. Rajeshwar Rao dated December 28, Torrent Investments sought directions to Nageswara Rao Y, the administrator of Reliance Capital.
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The letter said that the challenge process was concluded on December 21 with the administrator's email to Torrent Investments confirming its NPV bid amount of Rs 8640 crore as the highest bid amount.
However, Torrent Investments was made aware that a competing resolution applicant Hinduja Group had belatedly submitted a revised
financial proposal on December 22 after completion of the challenge process on December 21 and after having learnt that Torrent Investments had emerged as the highest bidder.
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As per earlier media reports, Hinduja offer of Rs 9,000 crore cash upfront trumps Torrent bid of just Rs 4,000 crore cash and the balance to be paid to lenders in three equal instalments in year 3/4/5 with zero interest.
The objective of the IBC Code is to maximise value for creditors. As such, the Hinduja bid is best for execution compared to Torrent as it has no requirement of sharing security as the CoC will be concerned with any dilution of current security.
In repeated Supreme Court judgements, it has been held that maximisation of value is a key factor in any plan approval by CoC.
The only resolution done for a financial services company under special powers of RBI Section 227 was DHFL which was won by Piramal Group.
In that case Adani Group, which was not even a resolution applicant, was admitted by CoC as it offered highest value to the Piramal bid.
