InvestorQ : What is the latest ton Reliance Home Finance? Is it the next bankruptcy case?
Riya Dwivedi made post

What is the latest ton Reliance Home Finance? Is it the next bankruptcy case?

Answer
user profile image
rhea Babu answered.
8 months ago


The troubles of the ADAG group appear to be spreading to Reliance Home Finance with debt investors of RHFL planning legal action against the company. RHFL is a unit of Reliance Capital and the action proposed may include initiating recovery proceedings in the National Company Law Tribunal (NCLT) against the stressed financier. RHFL, it may be recollected, had defaulted on bond repayments earlier this month. IDBI Trusteeship is representing the interests of RHFL’s non-convertible debenture (NCD) holders and it has apparently appointed Shardul Amarchand Mangaldas as the legal adviser for the affected investors. There are over 20,000 such aggrieved investors.

Currently, investors are weighing the option of filing the case in either the National Company Law Tribunal (NCLT) or at the Debt Recovery Tribunal (DRT) to recover their money invested in debt securities of RHFL. IDBI Trusteeship has already reached out to the company’s lenders for approval of the said scheme. The NCLT application is likely, but it will done through the Companies Act as there are instances of irregularities in the company functioning. A forensic report has also allegedly pointed to some deviations. While the interested parties have not either confirmed or denied the developments, it is clear that the cascading effect of debt is showing up.