Torrent moves Supreme court against Reliance Capital’s second round of auction

MUMBAI:  Torrent Investments has filed a plea in the Supreme Court challenging the National Company Law Appellate Tribunal’s (NCLAT’s) order to hold a second round of auction for Reliance Capital (RCap) assets. The plea comes after the NCLAT last week allowed lenders of Reliance Capital to hold an extended challenge mechanism or second round of auction for the sale of the debt-ridden financial services company.

Encouraged by the decision, the Committee of Creditors (CoC) of RCap decided to hold a second round of auction for the sale of company assets on March 20 in which lenders have asked bidders to offer a minimum of Rs 8,000 in cash upfront.

Torrent filed the plea on Tuesday against Vistra ITCL, a debenture trustee acting on behalf of the committee of creditors. In the second round of the auction, the lenders kept the minimum threshold or the bid starting value at Rs 9,500 crore, with the subsequent round rising to Rs 10,000 crore and by Rs 250 crore in any round that follows.

In the first round of the challenge mechanism, Torrent had emerged as the highest bidder with a bid amount of Rs 8,640 crore, while Hinduja Group firm IndusInd International Holdings Ltd (IIHL) was the second highest with Rs 8,110 crore bid.

The first round of the auction ran into a legal tangle after the IIHL made an all-cash bid of Rs 9,000 crore to the lenders after the completion of the auction process.

Torrent challenged the IIHL bid in the NCLT, though the company itself revised its own bid of Rs 8,640 crore by offering the entire amount in cash upfront as against Rs 3,750 crore offered in the auction.