Industry And the Department for Promotion of Internal Trade (DPIIT) has approved Hinduja Group company IIHL for the acquisition of debt-ridden Reliance Capital Limited. Sources have given this information. DPIIT's approval was required because some of the shareholders of IndusInd International Holdings Limited (IIHL) are residents of Hong Kong, a special administrative region controlled by China. According to Press Note-3, if an entity of any country (China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan) sharing a land border with India, or a citizen or permanent resident of any such country, intends to invest in India. If there is a beneficial owner, they are required to invest through the government approval route.
Will help in taking the solution plan forward
According to sources, the green signal from DPIIT will help in taking forward the resolution plan submitted by Mauritius-based IIHL, which has emerged as the successful bidder for the debt-ridden financial firm with a bid of Rs 9,861 crore. The Mumbai bench of the National Company Law Tribunal (NCLT) had approved the resolution plan of IIHL on February 27, 2024. DPIIT's approval was part of the resolution plan that was voted on and approved by 99.96 per cent of the members of the Committee of Creditors (CoC).
The deal is to be completed by January 31, 2025
The approval was important as the Hinduja Group had to complete the deal by the extended deadline of January 31, 2025. If the deadline is not met, the group will have to return Rs 3,000 crore raised from HNI (rich individuals), ultra-HNI (very rich individuals) and family offices for the deal. In November 2021, the Reserve Bank of India (RBI) dissolved the board of directors of Reliance Capital due to governance issues and payment defaults by the Anil Dhirubhai Ambani group company.
Image Credit: India_Tv.