The National Company Law Tribunal (NCLT) today declined a request by India Horizon Fund for an interim remain over Religare Enterprises’ movement to invest up to Rs 500 crore in its own arm Religare Capital Markets.
The tribunal also noted that there was “deliberate suppression of material facts” out of it by IDBI Trusteeship Services Ltd, a consenting party in the suit, which has already approached the Bombay High Court on precisely the exact same issue.
“Having heard the counsel for the parties about the grant of interim relief, we are of the considered view that no interim relief may be granted at this point,” said a two-member tribunal chair led by Chairman Justice M M Kumar.
Institutional investor, India Horizon Fund Together with IDBI Trusteeship Services, had transferred NCLT seeking a stay within the proposal from Religare Enterprises to invest in Religare Capital Markets for repaying debt related to Mauritius business and capital requirements Indian business.
The NCLT found that IDBI Trusteeship Services Ltd had made no disclosure to it on the suit before the Bombay High Court, in which it had been declined interim relief to exactly the same.
“Moreover, in this stage, the locus standi of the petitioner, if it is left alone without the consenting party (IDBI) will be just 5.59 percent and for that reason, there could be valid doubt for its locus standi,” that the tribunal added.
The sections mandate that only parties or individuals who have more than 10 percent stake in a firm may appeal in the NCLT.
“In view of the above, we decline to exercise our equitable discretion of granting some interim relief,” that the tribunal added.
The petitioners, however, have claimed to satisfy the criteria together with the approval letter of IDBI.
The NCLT has directed Religare Enterprises to file its response within four months and any rejoinder from the parties in a couple of weeks and contains fixed next date of hearing on November 8, 2017.
Religare Enterprises’ shareholders have given their consent to a ordinary resolution through postal ballot, the business said today in a regulatory filing.
In accordance with the voting response, 55.63 percent shareholders voted in favour of this proposition while the remaining 44.37 percent were against it.
The voting result also revealed that 99.95 percent of total votes cast by public institutional shareholders were against the resolution.
But, 99.03 percent of the public non-institution shareholders that participated in the voting were in favour of this proposal.
The voting has been closed on September 9.
In the postal ballot notice issued in July, Religare Enterprises had said it suggested to make additional capital investment of up to Rs 500 crore in Religare Capital Markets (RCML).
“The SBLC facility is falling because of repayment. Since RCML and RCMIML are in declines and also have negative cash flows, they require assistance from the holding company, which is Religare Enterprises Ltd,” that the July 26 notice said.
Religare Enterprises said it will use a part of selling proceeds from divestment of its health insurance business to generate investment in RCML.