‘Wait till Credit Suisse plea is decided’

Credit Suisse Group AG, a key financial creditor to Reliance Capital Ltd (RCap), warned that resolving the debt-ridden firm’s financial troubles may become costlier if a resolution plan is finalized even before the lender’s appeal against the rejection of a ₹650-crore claim is decided.

In a letter to RCap’s resolution professional, Nageswara Rao Y., on Wednesday, Credit Suisse said higher costs could arise from the potential need to restructure the committee of creditors, after the court’s ruling on its appeal. Mint has reviewed a copy of the correspondence.

“In order to achieve finality, bearing in mind the adherence to timelines of the insolvency and bankruptcy code, and to avoid material irregularity, it is important that the resolution plan be decided after the decision of claim rejection application,” it said.

Credit Suisse had filed claims of over ₹650 crore with the administrator overseeing its corporate insolvency resolution process in December 2021. However, the administrator informed the lender in February 2022 that the claim has been rejected. Credit Suisse subsequently appealed the decision, filing an application with a bench headed by Justices Shyam Babu Gautam and Subba Rao in the Mumbai National Company Law Tribunal, where the case is still pending.

The development comes weeks after the Hinduja Group emerged as the sole bidder in the second auction of debt-laden RCap, with an offer of ₹9,650 crore held in April following the Supreme Court’s approval on 23 March.

According to the letter, the financial creditor claimed that the approval of the resolution plan at this stage will not only be bad in law, leading to travesty of justice, but also against the intent of the IBC.

Credit Suisse requested Rao not to proceed with the discussion on the resolution plan, let alone finalize it. It added that the approval may have a direct bearing on the constitution of the CoC, and the consequent voting rights regarding the approval of the resolution plan and distribution of proceeds.