A consortium of alternative investment firm Varde Partners and institutional asset manager Arena has been allowed time till midnight of Saturday to make a bid compliant with norms for the debt-laden Srei group entities, sources said.
The administrator for Srei Infrastructure Finance and Srei Equipment Finance has shot out a letter to Varde-Arena consortium dismissing their allegations over the ‘challenge mechanism’ process adopted for resolution of the companies.
The consortium had raised concerns over the debt resolution process, calling it unreasonable, unfair, rushed and ad-hoc. The consortium has now been asked to make a bid compliant with the process, sources said.
Varde Partners-Arena had sent their revised plan after close of the ‘challenge mechanism’ window on Tuesday and claimed to be the highest bidder. Sources said despite improving their terms, their financial bid in terms of net present value turned out to be just Rs 4,687 crore, including revised upfront cash amount of Rs 3,600 crore.
Fresh fraud detected
The transaction auditor of debt-ridden Srei has indicated a fresh fraud amounting to Rs 296 crore under the erstwhile promoters.
According to the report prepared by the transaction auditor, the transactions occurred during financial years 2014-15 to 2021-22, Srei Infrastructure Finance Ltd said in a regulatory filing.
The fraud relates to certain disbursement made to a company called ARSS.
The amount of Rs 295.69 crore is the gross outstanding, including principal and interest recoverable from the customer, as on September 30, 2021, on account of the suspect disbursement of loans, it added.
Srei is undergoing an insolvency resolution under the Insolvency and Bankruptcy Code (IBC).
The administrator had appointed BDO India as a transaction auditor, which unearthed this fraud, it said, adding the application has been filed before the NCLT under Section 60(5) and Section 66 of the IBC on January 5, 2023.
Earlier, the transaction advisor had flagged fraud transactions worth over Rs 5,000 crore.
The Reserve Bank of India had in October 2021 superseded the boards of SIFL (Srei Infrastructure Finance Limited) and its wholly-owned subsidiary SEFL (Srei Equipment Finance Limited). A joint resolution is taking place for these companies for their outstanding liabilities of about Rs 32,000 crore.
