After DHFL, Srei turns into 2nd NBFC to be taken to NCLT

The Reserve Bank of India (RBI) on Monday stated that it has outmoded the boards of Kolkata-based non-banking monetary firms (NBFCs) Srei Infrastructure Finance and Srei Equipment Finance. The two companies will now be referred for insolvency proceedings within the second such occasion after Dewan Housing Finance Corporation Ltd (DHFL).
“In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL), owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations,” it stated.
Rajneesh Sharma, former chief basic supervisor at Bank of Baroda, has been appointed the administrator of the 2 firms below Section 45-IE (2) of the RBI Act. In addition, the RBI appointed a three-member advisory committee to help the administrator: R Subramaniakumar, former MD & CEO, Indian Overseas Bank, and former administrator for DHFL, TT Srinivasaraghavan, former MD, Sundaram Finance, and Farokh N Subedar, former chief working officer and firm secretary, Tata Sons. Hemant Kanoria, chairman, Srei Infrastructure Finance, stated that the corporate was shocked by the RBI’s transfer as banks have been repeatedly appropriating funds from the escrow account they’ve managed since November 2020. “We will take all necessary steps as advised by our lawyers in this regard,” Kanoria stated.