Arena Investors and Varde Partners are preparing to submit a plan for Srei

Srei group lenders have extended the deadline for potential lenders to submit resolution plans after they sought more time to understand the findings of an avoidance transaction audit and their impact, according to the note circulated by the administrator to lenders. The note said Arena Investors, Varde Partners and another potential bidder are actively considering submitting separate bids.
At a meeting of the committee of creditors held on Wednesday, most lenders voted to extend the deadline for receiving resolution plans to August 10 from the end of this month. Avoidance transaction audit provides details of those transactions which are prejudicial to the interest of the creditors.

In the last two months, the administrator has disclosed four transactions totalling Rs 5,159.4 crore classified as fraudulent by transaction auditor BDO India.



In a disclosure to stock exchanges on Thursday evening citing the transaction audit report, Srei said three transactions totalling Rs 2,133.7 crore were classified as fraudulent. In June, Srei filed an application with the National Company Law Tribunal about 3,025.7 crore of transactions which were classified as fraudulent.

Arena Investors, Varde Partners-affiliate VFSI Holdings Pte Ltd and two high net worth individuals - Shon Randhawa in partnership with Rajesh Viren Shah - are actively pursuing bidding for both Srei companies, the filing said.

Administrator Rajnish Sharma did not respond to a request for comment.

Hemant Kanoria-promoted Srei Infrastructure Finance and Srei Equipment Finance were admitted for insolvency proceedings last October.

The BDO audit report has classified three transactions of Rs 1,415.2 crore, Rs 433.8 crore and Rs 284.7 crore as fraudulent under Section 66 of the Insolvency and Bankruptcy Code, the filing with stock exchanges said.

The administrator also filed a report in this regard with the bankruptcy court.

According to the report, Rs 1,415.2 crore is the monetary impact of a disbursement made to the Shristi group, while the other two are related to loans given to Viom Infra Ventures (previously Quippo Infrastructure) and Samsara Energy (Quippo Energy).

In June, the administrator disclosed that transactions of Rs 3,025.7 crore classified as fraudulent were disbursements to the Power Trust entities. They include loans given to Power Trust, Kanoria Foundation and its trustees, India Power Corp Ltd, India Power Corp (Bodhgaya) Ltd, Tuticorin Electricity Supply Pvt Ltd, Bhaskar Silicon Pvt Ltd, Green Utility Pvt Ltd, Environ Energy Corp India Pvt Ltd, Meenakshi Energy Ltd, Devi Trading and Holding Pvt Ltd and certain other entities.

The three bidders have sought additional time to “understand the impact of avoidance transaction regarding the transaction audit report … and to evaluate the complex structure of Srei”, said a note sent by the administrator to lenders.

The administrator has admitted claims of Rs 30,000 crore from financial creditors.