Promoters of Srei Group on Wednesday moved the Bombay High Court challenging the appointment of an administrator by the Reserve Bank of India (RBI) with respect to Srei Infrastructure Finance Ltd (SIFL) and its wholly-owned subsidiary Srei Equipment Finance Ltd (SEFL).
The petition filed by Adisri Commercial Private Ltd and Srei Group promoters has sought a stay from the apex court on any insolvency proceedings against SIFL and SEFL. The Bombay High Court is likely to take up the matter tomorrow (Thursday).
The RBI on Monday had superseded the board of directors of SIFL and SEFL, owing to governance concerns and defaults by the companies in meeting payment obligations. Bank of Baroda's former chief general manager Rajneesh Sharma has been appointed as the administrator of the two companies.
It intends to initiate the process of resolution of the two NBFCs under the Insolvency and Bankruptcy Rules, 2019, the regulator said. The RBI also said it would apply to the NCLT for appointing the administrator as the insolvency resolution professional.
This is only the second time in as many years that RBI is referring entities for the resolution process under the Insolvency and Bankruptcy Code (IBC) after taking the first-ever such step in the case of DHFL back in 2019.
A Srei group spokesperson said SIFL was "shocked" by the RBI's move as banks have been regularly appropriating funds from the escrow account they have controlled since November 2020, and added that necessary steps as advised by its lawyers will be taken.