Final bid deadline extended for 2 Srei cos

The administrator of the twin Srei companies has extended the deadline to submit the final bid for them by ten days to August 29, and revised the terms for the resolution applicants, said two people aware of the development.

Late Friday evening, administrator Rajnish Sharma informed potential applicants about the deadline extension. He said the resolution plans must strictly comply with the terms of the RFRP (reference for resolution plan) along with the submission of earnest money.

The RFRP states that applicants must deposit earnest money of Rs 150 crore which would be forfeited if the Reserve Bank of India did not endorse the successful resolution applicant as “fit and proper”.


Late Thursday evening, the administrator revised the terms of the RFRP, stating that the resolution applicant (RA) should assign a value to the proceeds that could be recovered from the transactions categorised as fraudulent, preferential, or avoidance.

Disclosures made by the administrator to the stock exchange show that consultant BDO India has classified several transactions totalling over Rs 5,000 crore as fraudulent.

Sharma stated that the committee of creditors must endorse the value assigned to such transactions for the plan to be approved. The revised terms state that the RA should mention whether the proceeds from these transactions would be shared among lenders or remain with the company.

The administrator did not respond to ET’s request for comment. The revised terms aim to prevent litigations in future and maximise recoveries for lenders, one of the people said.

Two bidders had submitted their plans on August 10. Both were joint offers, one by Arena Investors along with Varde Partners, and the other by Shon Randhawa and Rajesh Viren Shah. Since both bidders did not make earnest money deposits, the administrator extended the deadline to August 19. In the past, bidders refused to make the deposit stating that the conditions were unreasonable.

Hemant Kanoria-promoted Srei Equipment Finance and Srei Infrastructure Finance were admitted for insolvency proceedings on October 4, 2021.

Srei’s administrator wants to avoid a situation like that in the resolution plan for Dewan Housing Finance Ltd (DHFL), and hence, revised the terms, the first person said.

Piramal Capital & Housing Finance, which acquired bankrupt housing finance company DHFL, had assigned just Rs 1 for Rs 23,815 crore transaction classified as fraud.

The loan transactions were known as Bandra Books since DHFL booked these loans in a virtual branch at Bandra and maintained a parallel account book. Investigative agencies found that Rs 11,755 crore was shown as disbursement to about 2,90,000 fictitious borrowers, though the money was disbursed to 91 borrowers.

Following an appeal by 63 Moons Technology, the National Company Law Appellate Tribunal (NLAT) directed lenders to reconsider the valuation of Rs 1 that was assigned to these transactions.