Religare Enterprises Limited (REL) today announced that its wholly-owned subsidiary Religare Finvest Limited (RFL) has completed a One Time Settlement (OTS) with 16 creditors by making a full and final payment of Rs 400 crore.
According to the settlement agreement with creditors dated December 30, 2022, the OTS ended on March 8, one month ahead of schedule.
The settlement is the final stage to close the legacy issues caused by past promoters’ misdeeds, REL executive chairman Rashmi Saluja said.
Since January 2018, when the new management took over, RFL has returned over Rs 9,000 crore to lenders from its collections and with the support of REL, he said.
The settlement will pave the way for RFL to relaunch its business and focus on creating a niche in the micro, small and medium enterprises (MSME) lending space, he said, adding that RFL will have a healthy balance sheet to support business growth over the next few quarters. .
Continuing with the objective of focusing on the rapid growth of the affordable housing finance business, he said, RFL’s subsidiary, Religare Housing Development Finance Corporation Limited (RHDFCL), will in due course become a direct subsidiary of REL.
OTS is where the management was able to resolve the legacy issues faced by the Religare Group due to the fraudulent activities of the previous promoters and paid a significant amount to the lenders while preserving the long term value of the Group. , he said.
“Thanks to our regulators and lenders for believing in the new management’s governance and revitalization initiatives… Religare 2.0 will be able to grow faster and also step into new businesses to turn 360. grade financial services group and enhance value for all its stakeholders,” he said.
RFL CEO Pankaj Sharma said that following the one-time settlement, RFL has reached a milestone to strengthen its financial performance and meet regulatory norms and is on a path to revitalizing its business.
Going forward, he said, RFL will continue to focus on lending to small and medium businesses by building a detailed book and carving out a niche in this important segment for the growth of the Indian economy.
The end of OTS cleared the way for RFL to exit the Corrective Action Plan (CAP) imposed by the Reserve Bank of India in January 2018 due to its weak financial health.
The RFL was in financial trouble due to misappropriation of funds by former promoters Shivinder Singh and his brother Malvinder Singh.
Capital markets regulator Sebi earlier this year imposed a total penalty of Rs 60 crore on 10 entities, including the Singh brothers, in a case related to the transfer of RFL funds.
In addition, the Singh brothers were banned from trading in the securities market for three years or until they recover the money transferred with interest, while others were banned for two years.
(Except for the title, this story was not edited by NDTV staff and was published on a syndicated channel.)
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