The Delhi High Court has called for ICICI Bank's position regarding the petition filed by Religare Finvest Ltd (RFL) that contests an order from the Debt Recovery Appellate Tribunal (DRAT). The DRAT ruling requires RFL to deposit 40% (Rs 116.85 crore) of its Rs 306 crore debt, along with interest, for its appeal to be considered. RFL contends it can only afford to deposit 25%, alleging that DRAT has overlooked its financial difficulties arising from previous management's fraud and fund misappropriation.
RFL has warned that the stipulated deposit could potentially disrupt its operations, which have been running at a loss since 2017. As of March 2022, the company's losses had escalated to Rs 2,270 crore. The Reserve Bank of India had imposed the Corrective Action Plan (CAP) framework on RFL in 2018, following large-scale fund siphoning by promoters Malvinder and Shivinder Singh from RFL and its parent company REL.
The appellate tribunal was examining RFL's appeal against the Debt Recovery Tribunal’s May order, which allowed ICICI Bank to recover Rs 306 crore in interest. A significant portion of RFL's assets under management are unrecoverable bad debts, and legal proceedings against the promoters have been initiated.
In the last financial year, RFL's total expenses surpassed Rs 639 crore, against a total income of just Rs 275.25 crore. This financial imbalance has left the company incapable of conducting new business.
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