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As the deadline for the submission of binding bids approaches, the bidders of <keyword id="6360090" type="General" weightage="100" keywordseo="reliance-capital" source="Orion">Reliance Capital</keyword>, including Hinduja, Torrent, Zurich, and Piramal have flagged off various legal issues to the lenders and Administrator, involving Reliance Capital and its subsidiaries. These legal issues involve a cumulative liability of Rs 22,000 crore, and they need quick resolution for the successful closure of RCAP's resolution plan. According to sources, the bidders are likely to make a condition precedent of these issues to any payment to the lenders. The two big issues flagged off by the bidders are the impending resolution of <keyword id="3649632" type="General" weightage="50" keywordseo="reliance-home-finance-ltd" source="Orion">Reliance Home Finance Ltd</keyword> (<keyword id="1590678" type="General" weightage="50" keywordseo="rhfl" source="Orion">RHFL</keyword>) and the legal battle between the Administrator and IDBI Trusteeship for the control of <keyword id="157626" type="General" weightage="50" keywordseo="reliance-general-insurance" source="Orion">Reliance General Insurance</keyword>'s shares, which is pending in the NCLT. Authum Investment and Infrastructure Ltd had been selected as the successful bidder for RHFL in June 2021, but the resolution process has not yet been completed due to various litigation involving the debenture holders. The total debt of RHFL is Rs 11,500 crore. As far as Reliance General Insurance is concerned, the Independent actuarial <keyword id="5413795" type="General" weightage="50" keywordseo="tower-watson" source="Orion">Tower Watson</keyword> has valued this business at Rs 9,500 crore. Apart from these, the two other legal cases flagged off by the bidders are Axis Bank's claim of Rs 150 crore against Reliance Capital, which the bank has lost in the NCLT, and a case involving Administrator and IndusInd Bank, involving arbitration of Nippon Asset Management shares. The total liability in this matter is Rs 650 crore. The last date for submitting binding bids is November 28. The quick resolution of these legal matters is a challenge for the Administrator for the successful closure of the RCAP resolution plan. Reliance Capital had received 14 non-binding bids for its multiple businesses. Six companies had submitted bids for the entire company, while the rest of the bidders had submitted bids for its multiple subsidiaries. Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment, and B Right Real Estate have submitted bids in the range of Rs 4,000 crore to Rs 4,500 crore for Reliance Capital's entire assets. For Reliance General Insurance business, Piramal Finance has bid Rs 3,600 crore, while <keyword id="1657992" type="General" weightage="50" keywordseo="zurich-insurance" source="Orion">Zurich Insurance</keyword>'s bid is Rs 3,700 crore. The third bidder, Advent, has bid Rs 7,000 crore for Reliance General Insurance. Jindal Steel and Power and <keyword id="8564251" type="General" weightage="50" keywordseo="uvarc" source="Orion">UVARC</keyword> have submitted bids for Reliance Capital's ARC business. For other assorted assets of Reliance Capital, 3 bidders -- Choice Equity, Global Fincap, and <keyword id="15413642" type="General" weightage="50" keywordseo="grand-bhawan" source="Orion">Grand Bhawan</keyword> -- have submitted the bids. RCAP's life insurance business, <keyword id="15259421" type="General" weightage="50" keywordseo="rnlic" source="Orion">RNLIC</keyword>, had not received any bid, but later on Aditya Birla Capital and Nippon Life Insurance, which is already holding 49 per cent equity in RNLIC, have evinced interest in acquiring RCAP's 51 per cent stake in this business. At the beginning of the resolution process of Reliance Capital over 54 companies had submitted Expression of Interest (EOI) for its various assets, out of which only 14 are now in the fray. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/electric-mobility-platform-moeving-raises-2-5-million-from-jsw-ventures/articleshow/95252790.cms">Electric mobility platform MoEving raises $2.5 million from JSW Ventures</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/tumblr-to-allow-nudity-but-not-sexually-explicit-images/articleshow/95253755.cms">Tumblr to allow nudity but not sexually explicit images</a>

Reliance Capital bidders flag off multiple legal issues involving Rs 20,000 crore liability

Shares of Anil Ambani-led group firms -- <keyword id="20367971" type="General" weightage="20" keywordseo="reliance-home-finance" source="keywords">Reliance Home Finance</keyword> Ltd, <keyword id="6360089" type="General" weightage="20" keywordseo="Reliance-Power" source="Orion">Reliance Power</keyword> and <keyword id="46907" type="General" weightage="20" keywordseo="Reliance-Communications" source="Orion">Reliance Communications</keyword> -- hit their <keyword id="10112182" type="General" weightage="20" keywordseo="lower-circuit-limits" source="Orion">lower circuit limits</keyword> on Monday as investors continued to desert the counters after markets regulator <keyword id="19901201" type="General" weightage="20" keywordseo="Sebi" source="keywords">Sebi</keyword> barred the industrialist and 24 others from the securities market for five years on charges of diversion of funds from <keyword id="19936674" type="General" weightage="20" keywordseo="Reliance" source="keywords">Reliance</keyword> Home Finance Ltd. The stock of Reliance Power dropped 4.99 per cent to hit the lower circuit limit of Rs 32.73 on the BSE. Shares of Reliance Home Finance Ltd tumbled 4.93 per cent to Rs 4.24 -- the lowest trading permissible limit for the day. Reliance Communications dived 4.92 per cent to touch the lower circuit of Rs 2.32. Reliance Infrastructure also declined 2.90 per cent to Rs 205.55. Shares of Reliance Infrastructure, Reliance Home Finance and Reliance Power had slumped on Friday also. Sebi has imposed a penalty of Rs 25 crore on Ambani and restrained him from serving as a director or Key Managerial Personnel (KMP) in any listed company or Sebi-registered entity for five years. Besides, a fine ranging Rs 21 crore to Rs 25 crore has been levied on 24 entities. Also, the regulator barred Reliance Home Finance from the securities market for six months and slapped a fine of Rs 6 lakh on it. After receiving multiple complaints alleging the diversion/siphoning of funds of Reliance Home Finance Ltd, Sebi conducted an investigation for the period of FY 2018-19 to ascertain any regulatory violations. In its probe, Sebi found that <keyword id="19902194" type="General" weightage="20" keywordseo="Anil-Ambani" source="keywords">Anil Ambani</keyword>, with the help of RHFL's KMPs -- Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah -- have orchestrated a fraudulent scheme to "siphon off" funds from RHFL by disguising them as loans to entities linked to him. Although the board of directors of RHFL had issued strong directives to stop such lending practices and review corporate loans regularly, the company's management ignored these orders. Sebi, in its 222-page order on Thursday, noted the cavalier approach by the company's management and promoter in approving loans worth hundreds of crores to companies that had little to no assets, cash flow, net worth, or revenue. This suggests a sinister objective behind the 'loans'. The situation becomes even more suspicious when considering that many of these borrowers were closely linked to the promoters of RHFL. Eventually, most of these borrowers failed to repay their loans, causing RHFL to default on its own debt obligations. This led to the company's resolution under the RBI Framework, leaving its public shareholders in a difficult position.

Reliance Home Finance, Reliance Power shares hit lower circuit limits

New Delhi, Six bidders have submitted bids for <keyword id="4957940" type="COMPANY" weightage="20" keywordseo="reliance-home-finance-limited">Reliance Home Finance Limited</keyword> (RHFL). Of these, only two bidders submitted compliant and <keyword id="3860654" type="PERSON" weightage="20" keywordseo="binding-bids">binding bids</keyword> and other four bids are non-binding and not compliant with bid conditions. The lenders have decided to further extend the bidding timeline till January 31, 2021, in order to accommodate the four non compliant bidders. The two compliant bidders opposed the arbitrary change of rules of the game by the lenders and the bidders threatened to walk away from the non-transparent process. The lenders of RHFL have received a total of six bids for its assets in response to the resolution process being run. However, only two bids are binding and compliant in nature with the bid conditions. The two compliant and binding bids are from Avenue, a US based fund and ARCIL, an Asset Reconstruction Company (ARC), as a joint bid. The second bid is by <keyword id="10464876" type="COMPANY" weightage="20" keywordseo="authum-investment-infrastructure-limited">Authum Investment &amp; Infrastructure Limited</keyword>, listed non banking finance company (NBFC). The other four bids are non-binding in nature and are also not compliant with the bid conditions. These for bidders have also not placed the mandatory bid bond of ₹10 crore. Kotak Special Situations Fund (KSSF) and <keyword id="10464877" type="COMPANY" weightage="20" keywordseo="asset-care-and-reconstruction-enterprise-limited">Asset Care and Reconstruction Enterprise Limited</keyword> (ACRE) have submitted non binding bid with several conditions, including exclusivity and has also asked for additional time of two months to complete due-diligence, even after the deadline which was extended multiple times. The other two ARCs namely, Invent and Alchemist have also submitted conditional bids which are non-compliant with the bids condition and have not paid the mandatory bid bond of Rs 10 crore. The lenders at their meeting held on December 17, 2020 decided to extend the bid time by two months till January 31, 2021 and invite revised bids from all the Bidders, so that non-compliant bidders may be accommodated. Avenue/Arcil and Authum -- the two binding and compliant bidders have opposed the lenders action citing an attempt to change the rules of the game and have threatened to walk away from the process. In August this year, lenders led by Bank of Baroda had invited expressions of interest for the assets of Reliance Home Finance and <keyword id="3646337" type="COMPANY" weightage="20" keywordseo="Reliance-Commercial-Finance">Reliance Commercial Finance</keyword>, both arms of <keyword id="6360090" type="DOMAIN" weightage="20" keywordseo="reliance-capital">Reliance Capital</keyword>. The resolution process is being managed by <keyword id="10464875" type="COMPANY" weightage="20" keywordseo="bobcapital-markets">BoBCapital Markets</keyword> (BoB Caps) and Ernst &amp; Young (EY). SEE ALSO: <a href="https://www.businessinsider.in/tech/enterprise/news/wistron-apple-iphone-manufacturer-could-face-these-penalties-if-found-guilty/articleshow/79790319.cms">If investigators find Wistron management guilty, here's what is at stake for the company</a> <a href="https://www.businessinsider.in/stock-market/news/heres-what-analysts-say-if-you-should-subscribe-or-not-to-the-300-crore-ipo-of-antony-waste-handling-cell/articleshow/79790998.cms">Antony Waste Handling Cell ₹300-crore IPO will open on Monday— these are the risks and opportunities</a> <a href="https://www.businessinsider.in/business/news/ikea-india-cfo-says-she-still-has-3500-crore-to-be-spent-in-india-the-pandemic-has-changed-targets-but-not-the-investment-plan/articleshow/79790938.cms">INTERVIEW: Ikea CFO says she still has ₹3,500 crore to be spent in India⁠— the pandemic has changed targets but not the investment plan</a>

Six bidders submitted bids for Reliance Home Finance

<ul><li><keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword> is dealing with defaults on spectrum payments by his company <keyword id="46907" type="COMPANY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword> while separately battling allegations that he received a huge tax benefit from the Indian government’s Rafale deal with France. </li><li>And now, he has to contend with repeated credit <keyword id="82980" type="PERSON" weightage="20" keywordseo="Downgrades">downgrades</keyword> for three key subsidiaries: Reliance Home Finance (RHFL), Reliance Commercial Finance (RCFL) and Reliance Capital. </li><li>The downgrades will make it even harder for the companies to meet loan payments. </li></ul>Anil Ambani, the head of the indebted Reliance Group, isn’t having an easy go of it. The brother of India’s richest man, <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>, is dealing with defaults on spectrum payments by his company Reliance Communications while separately battling allegations that <a href="https://www.thehindu.com/news/national/anil-ambani-firm-got-1437-mn-tax-relief-from-france-after-rafale-announcement-le-monde-report/article26828271.ece">he received a huge tax benefit</a> from the Indian government’s Rafale deal with France. And now, he has to contend with repeated credit downgrades for <a href="https://economictimes.indiatimes.com/mf/mf-news/rating-cut-for-two-reliance-group-company-papers-alarms-market/articleshow/69089430.cms?from=mdr">three key subsidiaries</a>. The debt instruments of Reliance Home Finance (RHFL) and Reliance Commercial Finance (RCFL) have been downgraded by CARE Ratings, a domestic ratings agency, after the two non-banking financial companies (NBFCs) missed or delayed loan repayments. After being downgraded 10 <a href="https://www.thehindubusinessline.com/news/reliance-adags-downgrade-spells-more-trouble-for-nonow-rattles-mfs-nodebt-funds/article26973193.ece">days ago</a>, the long term debt programmes of both companies were given “D” ratings from an original rating of “BBB+”. This indicates that they could soon be in default. The subsidiaries are still reeling from the larger <a href="https://www.businessinsider.in/as-indias-shadow-banks-brace-for-a-tough-2019-the-central-bank-and-government-will-try-and-prevent-a-repeat-of-the-ilfs-crisis-by-solving-the-data-problem/articleshow/67419846.cms">liquidity crisis in the NBFC sector</a>, which was precipitated by the collapse of IL&amp;FS. In fact, since December 2018, the companies have been trying to raise cash by selling off <a href="https://economictimes.indiatimes.com/mf/mf-news/rating-cut-for-two-reliance-group-company-papers-alarms-market/articleshow/69089430.cms?from=mdr">high-quality loans.</a> CARE also gave the long-term debt programme of Reliance Capital, the investment banking subsidiary of Reliance Group, <a href="https://www.livemint.com/mutual-fund/mf-news/more-trouble-for-debt-funds-care-downgrades-reliance-commercial-finance-to-d-1556351386728.html">a D rating.</a> In response, Reliance Capital termed the action <a href="https://www.livemint.com/companies/news/rating-action-unjustified-and-unwarranted-reliance-capital-1556382626013.html">“unjustified”</a>. The shares of the company are <a href="https://www.google.com/search?rlz=1C1GCEU_enIN820IN820&amp;ei=1HvGXJuYJcTjvgSRyLLQBw&amp;q=reliance+capital+share+price&amp;oq=reliance+capital+share+price&amp;gs_l=psy-ab.3..0i131i70i250j0l9.1211.2864..2976...0.0..0.200.1547.0j10j1......0....1..gws-wiz.......0i71j0i131j0i67j0i131i67.phJoyBXRrYQ">down 4%</a> so far today. The downgrades will make it even harder for the companies to avail of funding. A number of mutual funds (MFs) and asset management companies are exposed to the three companies, and as a result, will reduce their positions. In fact, the Reliance Group’s own mutual fund wrote down the value of its holdings in <a href="https://economictimes.indiatimes.com/markets/stocks/news/reliance-mf-writes-down-debt-exposure-to-2-other-adag-firms/articleshow/69086653.cms">RHFL and RCFL</a>. MFs are already reeling from downgrades to a spate of large companies like Essel, Zee Group and DHFL. As a result, they have no choice but to <a href="https://www.businessinsider.in/indias-lehman-moment-seems-closer-as-top-mutual-funds-defer-dues/articleshow/68831689.cms">delay payouts to investors.</a> SEE ALSO: <a href="https://www.businessinsider.in/supreme-court-holds-anil-ambani-companies-guilty-of-contempt/articleshow/68074443.cms">Supreme Court holds Anil Ambani companies guilty of contempt</a> <a href="https://www.businessinsider.in/indias-lehman-moment-seems-closer-as-top-mutual-funds-defer-dues/articleshow/68831689.cms">India's 'Lehman moment' seems closer than ever as top mutual funds defer dues to investors</a>

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Reliance Capital bidders flag off multiple legal issues involving Rs 20,000 crore liability

ANI

Reliance Home Finance, Reliance Power shares hit lower circuit limits

PTI

Six bidders submitted bids for Reliance Home Finance

IANS

Anil Ambani’s woes get compounded with a series of downgrades for three Reliance Group subsidiaries

Dilsher Dhillon

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