Shivani Gadhavi
Published On: January 03, 2022 at 13:14 IST
An administrator appointed by the Reserve Bank of India for the Srei Infrastructure Finance wants to retain Srei’s control over its subsidiary asset management firm called Trinity, which is said to be in operation to run multiple funds with diverse investments.
The Reserve Bank of India, with fear of losing Trinity Alternative Investment Managers Ltd, appointed its administrator for Srei Infrastructure. The Administrator served a legal notice to Trinity and then filed a plea in the Kolkata Bench of National Company Law Tribunal, seeking a stay on the proposal of the Boards of Directors of Trinity for its own rights.
Srei which currently has 51% of Trinity’s ownership, cannot sanction a fund outflow for subscribing to rights offer to a subsidiary, in this instance Trinity, due to the current scenario. So, this situation may dilute Srei’s holding over Trinity below 50% if the stay is not granted.
The inter-linked pattern of transactions by Trinity makes it very important under the corporate resolution of Srei companies. A banker to Srei stated, “The administrator would never want this, given the importance of Trinity and the multiple levels of transactions.”
An employee at Srei stated, “Under the resolution process, the administrator has to maximize the values of assets underlying the loans given by SIFL and Srei Equipment Finance, and also make the most out of their equity investments — like the 51% ownership in Trinity. But this would be difficult if Srei becomes a minority shareholder in Trinity.”
