New Delhi: The Reserve Bank of India (RBI) on Monday said that it has superseded the board of directors of non-banking financial companies Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) due to governance concerns and defaults. The central bank added that it will initiate bankruptcy proceedings against the companies.
"The Reserve Bank has today superseded the Board of Directors of SIFL and SEFL, owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations," the RBI stated in a notification.
The central bank's notification also said that Rajneesh Sharma, former Chief General Manager, Bank of Baroda, has been appointed as the Administrator of the non-banking financial companies.
The Reserve Bank has constituted a three-member advisory committee to assist the Administrator in discharge of his duties.
The members are R Subramaniakumar, former MD & CEO, Indian Overseas Bank; T T Srinivasaraghavan, former Managing Director, Sundaram Finance Limited; and Farokh N Subedar, former Chief Operating Officer and Company Secretary, Tata Sons Limited.
Srei group owes around Rs 18,000 crore to around 15 lenders.
Srei said its total liabilities are around Rs 18,000 crore of bank loans, and another nearly Rs 10,000 crore of external commercial borrowings and bonds. Realisable assets, including arbitration awards, are higher.
The NBFC has also been battling a human resource crisis since December last year with nearly 230-250 people leaving the Srei group, as the pandemic-induced economic crisis created an asset-liability mismatch.
Srei group mainly serves the MSME and infrastructure sector.
The shares of Srei Infra settled 2.12% higher at Rs 8.66 on the BSE index.
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