Administrator Appointed By RBI Takes Charge Of Srei Infra, subsidiary

According to reports by CARE Ratings, dated March 6, Srei Infrastructure Finance owes edges loans worth Rs 11,117.71 crore.

The save Bank of India-appointed administrator has taken charge of Srei Infrastructure Finance and its wholly-owned subsidiary Srei Equipment Finance. This happened after the central bank came down heavily on both the companies over governance issues and superseded the boards of directors.

Citing governance concerns and defaults by the two NBFCs in meeting their various payment obligations, the RBI on Monday superseded their boards and appointed Rajneesh Sharma, former chief general manager of Bank of Baroda, as the administrator of the companies.

“The administrator entered Srei offices on Monday evening after the RBI issued its order, and he took charge closest. On Tuesday, he talked to senior officials of the two companies,” two persons familiar with the matter told FE. The central bank has also constituted a three-member Advisory Committee to assist the administrator in the release of his duties. The members of the Advisory Committee are R Subramaniakumar, former MD & CEO, Indian Overseas Bank; T T Srinivasaraghavan, former MD, Sundaram Finance, and Farokh N Subedar, former COO and company secretary, Tata Sons. On Tuesday, Srei Infrastructure Finance’s scrip closed 5% lower at Rs 8.17 on the BSE.

Commenting on the development on Monday, Srei chairman Hemant Kanoria said, “We are shocked by the RBI’s move”. According to Kanoria, edges have been regularly appropriating funds from the escrow account they have controlled since November 2020. “additionally, we have not received any communications from edges on any defaults,” he said.

Kanoria said although Srei had submitted a proposal to pay the complete amount to edges under a scheme filed under Section 230 of the Companies Act, 2013, in October 2020, the lenders have neither accepted the scheme nor hypothesizedv a payment schedule permissible to them.

“There has never been any delay in loan servicing by Srei in the past before Covid-19 ravaged the country. We are also surprised because the NCLT order for all creditors is nevertheless in course of action. There is also an order for “no coercive measures” by the creditors and/or regulators,” Kanoria said, adding Srei would take all necessary steps as advised by its lawyers in this regard.

According to reports by CARE Ratings, dated March 6, Srei Infrastructure Finance owes edges loans worth Rs 11,117.71 crore, except noticeable bonds and non-convertible debentures (NCDs) worth Rs 710.63 crore. Srei Equipment Finance has noticeable bank loans worth Rs 16,912.21 crore and other debt instruments worth Rs 499.45 crore. All these facilities and instruments were rated ‘D’, or default grade, in March. At the end of the first quarter this fiscal year, promoter and promoter group held 60.80% stake in Srei Infrastructure Finance.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Administrator appointed by RBI takes charge of Srei Infra, subsidiaryFinancial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.



Click: See details

Leave a Reply