RBI files insolvency pleas against two Srei Group firms in NCLT

The RBI on Friday filed pleas before the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against two Srei Group firms.

The Reserve Bank of India filed two separate petitions before the Kolkata-bench of NCLT against two non-banking financial companies-Srei Infrastructure Finance and Srei Equipment Finance.

The matters were heard on Friday by a two-member NCLT bench, which is expect to pass an order this evening.

The two petitions were filed by RBI through its counsel Sanjay Ginodia, senior partner of R Ginodia & Co.

According to Ginodia, he submitted arguments on behalf of RBI before the NCLT bench on Friday.

An order is expected by this evening, Ginodia told PTI.

The two entities owe over Rs 30,000 crore to banks and financial institutions.

The move comes after the Bombay High Court on October 7 dismissed Srei Group's plea against RBI action on SREI Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL).

Srei Group had challenged RBI's decision to supersede the boards of the two firms and initiate insolvency proceedings against them.

On October 4, RBI had superseded the board of directors of SIFL and SEFL, owing to governance concerns and defaults by the companies in meeting payment obligations.

RBI had said it intended to initiate the process of resolution of the two NBFCs under the Insolvency and Bankruptcy Rules, 2019.

It had also said it would apply to the NCLT for appointing an administrator as the insolvency resolution professional.