Deadline for Srei Infra creditors to submit claims ends tomorrow

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#Adisri commercial private ltd, #Kolkata NCLT, #RBI, #SREI Equipment Finance, Moneycontrol reported , announced , Srei Infra , governance concerns and defaults , on October 7 dismissed, writ petition against the RBI

SREI Group

The deadline set by Reserve Bank of India-appointed administrator of Srei Infrastructure Finance for creditors to submit their claims will end tomorrow (October 22). The administrator had given 14 days for the creditors of Srei to submit claims from the date of intimation of the NCLT proceedings.

According to people familiar with the development, a few top level employees of the firm have already submitted claims to seek clearance of salary dues.  Early this month, the Srei administrator had issued a newspaper advertisement calling for claims from Srei’s creditors, including the employees.

Lenders had capped the salaries of Srei executives at Rs 50 lakhs per annum in December last year. The salary cap was removed in April this year. However, even after around six months, the arrears are yet to be paid to Srei employees.

On October 11, Srei administrator Rajneesh Sharma had issued a public notice asking SIFL’s creditors to submit their claims after the Kolkata NCLT ordered the commencement of the corporate insolvency process against the Srei group firm on October 8.

Srei companies, Srei Infrastructure Finance and Srei Equipment Finance, together owe around Rs 30,000 crore to creditors which include banks, NCD holders and employees. Uco Bank has the maximum exposure among lenders to Srei, around Rs 2,000 crore. Together, Srei owes around Rs28,000 crore to banks. But banks claim that the actual amount is much higher than this amount.

On October 12, Moneycontrol reported about the plan of the employees to approach the administrator to seek clearance of salary dues. On October 4, the RBI announced the takeover of the boards of directors of Srei Infra and Srei Equipment Finance Limited 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.

The Bombay High Court on October 7 dismissed Srei Group’s plea against the Reserve Bank of India’s (RBI) action on Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL).

Srei Group promoters, Adisri commercial private ltd, had filed a writ petition against the RBI challenging the order and had also sought a stay on initiating insolvency proceedings against SIFL and SEFL. But, the Bombay HC rejected this petition.

The trigger for Srei’s downfall was the collapse of Infrastructure Leasing & Finance Ltd in late 2018. The resultant liquidity crunch affected all non-banking financial companies (NBFCs). Banks shut funding channels to all such entities and SEFL had to call off its initial share sale. The group didn’t recover from the liquidity shock.

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