Bombay High Court: Srei Group Promoters contest RBI Action

Aishwarya Rathore-

Published On: October 07, 2021 at 13:23 IST

The Promoters of the Kolkata-based Srei Group have moved to the Bombay High Court against the Reserve Bank of India’s (RBI) decision to supersede the Boards of two Companies, Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL).

The Promoter of Srei Infra, Adisri Commercial Pvt. Ltd, filed a Writ Petition in the High Court against the RBI for failing to provide proper notice before taking control of the businesses.

The promoters also sought a stay on Insolvency proceedings against the two Firms, as well as a Status Quo on actions of all creditors.

Srei Group had expressed shock at RBI’s move, alleging that the group had not received any communication from Banks on any default.

A spokesperson for the Company stated, “We had submitted a proposal to pay the full amount to the banks under a scheme filed under Section 230 of the Companies Act 2013 in October 2020. However, they have neither accepted the scheme nor proposed a payment schedule acceptable to them.”

The statement added, “We are also surprised because the NCLT order for all creditors is still in process. There is also an order for “no coercive measures” by the creditors and/or regulators. We will take all necessary steps as advised by our lawyers in this regard.”

On October 4, the RBI announced the takeover of the Boards of Directors of SIFL and SEFL due to governance concerns and defaults by Srei Group Companies.

The RBI also appointed Rajneesh Sharma, the Former Chief General Manager at Bank of Baroda, as Administrator.

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