Aircel resolution plan: violation of SARFAESI norms by UVRACL

The Reserve Bank of India warned the UV Assets Reconstruction Company Limited (UVARCL) that its certificate of registration could be cancelled as it is violatIng the norms laid down under the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest) Act, 2002. According to SARFAESI Act, 2002, an Asset Reconstruction Company cannot infuse equity into an insolvent company at the resolution stage.

RBI stated that it had rejected the resolution plan of Aircel in October last year and despite that, UVARCL went ahead with it and did not inform the National Company Law Tribunal of the regulatory body's decision.