The Supreme Court has allowed creditors in the Anil Ambani-promoted Reliance Commercial Finance (RCFL) to go ahead with the resolution plan for the company, clearing implementation of the recovery plan more than a year after lenders had approved it.
The court was deciding an appeal by the Securities and Exchange Board of India (Sebi) seeking a stay on voting by creditors because it wanted all bond holders to participate in such votes, contrary to the debenture trust deed (DTD) and central bank guidelines that expect only 75% of the bondholders to vote.
A three-judge bench headed by justice DY Chandrachud, while observing that Sebi norms took precedence over central bank guidelines, still gave a go-ahead to the plan citing delays if voting is called afresh.
“The different voting mechanism proposed under the SEBI circular will further delay the resolution process and potentially disrupt the efforts undertaken by the stakeholders, including the retail debenture holders. Such unscrambling of the resolution process will not only prove time-consuming, but may also adversely affect the agreed realized gains to the retail debenture holders, who have already consented to the negotiated settlement before the High Court,” the apex court said.
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