bidders for bankruptcy Mr. Group companies on Wednesday refused to deposit Earnest Money (EMD) of ₹150 crore – which was the last day to submit a resolution plan – due to a dispute with the administrator over unusual terms attached to the deposits, two people said. Said development.

On Wednesday, administrator Rajneesh Sharma got two plans – one from Arena Investor In partnership with a Verde Partners affiliate and another joint offering from Shaun Randhawa and Rajesh Viren Shah – but they pushed back the deadline for the submission of final bids to 19 August.

People said that since both the bidders did not submit the EMD, they were left with no option but to extend the time limit.

As per the terms of Request for Proposal, a scheme is considered void if the bidder does not generate EMD of ₹150 crore and provides performance guarantee of ₹550 crore. Central to the controversy is one of the terms of the RFP, which states that if the Reserve Bank of India does not endorse the successful resolution applicant as “fair and reasonable”, the EMD money will be forfeited. and Srei Equipment Finance are RBI regulated lenders.

Both the bidders objected to the condition of forfeiture of EMD on the ground that it was not within their control if the regulator decided to reject their names. According to bankers, this condition was imposed because if the regulator did not support the bidder, the whole exercise would be in vain. “In such a situation, it will be the responsibility of the successful bidder to persuade the regulator,” said a bank official.

To resolve the dispute, the bidders proposed that the EMD would be refunded at the end of one year if the regulator does not approve the name of the successful bidder within this time frame. The administrator rejected the offer, the people cited above said.

As per the rules governing finance companies bankruptcyOnce the bidder’s plan is approved by most of the lenders, it will require approval not only from the adjudicating authority but also from the RBI. A successful bidder can be executed only after the banking regulator has approved the successful bidder as ‘fit and proper’. In case of all other sectors, the successful bidder may obtain a bankrupt Company if the adjudicating authority supports the resolution plan.

If the date of bidding for Srei companies is not extended, both the bids received by the Administrator on Wednesday evening will be treated as void.