The RBI on Monday said it has decided to retain the advisory committee of Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) to advise the administrator in the operations of the two Srei group companies during the corporate insolvency resolution process.
After superseding the boards of SIFL and SEFL last Monday, the Reserve Bank had appointed a three-member advisory committee to assist Rajneesh Sharma, administrator of the two crisis-ridden firms.
The members of the committee are: R Subramaniakumar (Former MD & CEO, Indian Overseas Bank), T T Srinivasaraghavan (Former Managing Director, Sundaram Finance Limited), and Farokh N Subedar (Former Chief Operating Officer and Company Secretary, Tata Sons Limited).
On October 8, the central bank had filed applications for initiation of corporate insolvency resolution process against SIFL and SEFL at the Kolkata Bench of the National Company Law Tribunal.
In a statement on Monday, the RBI said upon admission of the petitions by the NCLT it has decided that the three-member committee "shall continue as the advisory committee" constituted under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.
The advisory committee, it added, shall advise the administrator in the operations of the SIFL and SEFL during the corporate insolvency resolution process.
It may be mentioned that the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 provide for the concerned financial sector regulator appointing a committee of advisors to advise the administrator in the operations of the financial service provider during the corporate insolvency resolution process.
Srei Group, which mainly caters to the MSME and infrastructure sectors, owes around Rs 18,000 crore to around 15 lenders, including Axis Bank, UCO Bank and State Bank of India, and another nearly Rs 10,000 crore of external commercial borrowings and bonds.
The Bombay High Court on October 7 had dismissed Srei Group's plea against RBI action on SREI Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL).
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