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NCLT disqualifies Citi Securities as financial creditor of Reliance Naval

A critical legal obstacle in the endeavors by Indian public-sector banks to recover dues from Anil Ambani’s obligation loaded Reliance Naval and Engineering Ltd has been taken out with Citi Securities and Financial Services Pvt Ltd losing its request under the watchful eye of the National Company Law Tribunal (NCLT), Ahmedabad.

Mumbai-enrolled Citi Securities (not connected with the American global investment bank and financial services organization Citigroup) had moved the NCLT looking to be perceived as a financial creditor with a case of Rs 2,538 crore of appointed obligation due from Reliance Naval. The organization likewise looked to be considered a democratic individual from the Committee of Creditors (CoC) directing the bankruptcy and insolvency process of the obligation-loaded firm.

In an order last week, NCLT has said the “assignment of debt was not in good faith as portrayed and rather shows that the arrangement was made with a view to get backdoor entry into the CoC through the applicant” and “to have control over the resolution process as Reliance Infrastructure Ltd (another Anil Ambani group company) is a related party of Reliance Naval and cannot be a member of the CoC”.

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