In Short:
The Committee of Creditors for Reliance Capital has asked the NCLAT to impose a ₹400 crore interest charge on Hindujas-owned IndusInd International Holdings (IIHL) for delaying the insolvency process. They argue that IIHL shouldn’t get any extensions and should forfeit a ₹2,750 crore deposit if delays continue. The CoC claims they lost this amount in potential earnings due to IIHL’s postponement.
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<h2>The Reliance Capital Saga Continues</h2>
<p>The Committee of Creditors (CoC) representing **Reliance Capital** has taken a significant step by submitting an application to the **National Company Law Appellate Tribunal (NCLAT)**. They are urging the Tribunal to impose a hefty interest charge of ₹400 crore on **IndusInd International Holdings Limited (IIHL)**, owned by the **Hinduja Group**, due to delays in executing the approved Corporate Insolvency Resolution Process (CIRP).</p>
<h3>Calling for Timely Action</h3>
<p>In a clear message, the CoC has stressed that IIHL should not receive any extensions for finalizing the CIRP. Furthermore, they mentioned that should there be any additional delays, IIHL could face forfeiting their deposit of ₹2,750 crore, which is currently held in an escrow account.</p>
<h3>Justification for Interest Claims</h3>
<p>The CoC has explained their stance, citing that **Life Insurance Corporation of India (LIC)**, the country's largest insurance provider, invested in certain bonds of **Reliance Capital** at a substantial interest rate of 16.65% per annum. The CoC argues that using this same measure, IIHL should be held accountable to pay the ₹400 crore in interest for the delay, starting from May 27. This is important, as those funds could have been utilized by lenders to generate income.</p>
<h3>Impact of Delays</h3>
<p>On the flip side, by postponing the implementation of the CIRP, IIHL appears to be benefiting by avoiding interest payments on a staggering ₹7,300 crore of debt. The CoC claims that IIHL has effectively saved on these costs since interest would have been applicable from May 27.</p>
<h3>Losses Incurred by Creditors</h3>
<p>The CoC is facing significant losses—estimated at around ₹400 crore—based on what returns **LIC** could have accrued had they successfully recovered the funds through the CIRP process. Interestingly, the financing costs and Internal Rate of Return for IIHL align within a similar range, according to the CoC's application.</p>
<h3>Seeking Compensation for Lenders</h3>
<p>While IIHL may have managed to reduce its financial obligations, the lenders have clearly been the ones losing out due to the requested extensions from the company. In light of this situation, the CoC is calling upon the NCLAT to order IIHL to pay ₹400 crore as compensation for the extended timeline of their case.</p>
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