Mumbai: The Reserve Bank of India (RBI) has approved Areion Group’s proposed Rs 936-crore acquisition of fraud-hit mortgage lender Aviom India Housing Finance, clearing a key regulatory hurdle in the resolution process, people familiar with the matter said.
The banking regulator has also granted its ‘fit-and-proper’ approval to Areion Group promoter Manish Lalwani, a mandatory requirement for a change in control of a regulated financial institution.
ET had first reported on June 17 that Areion Group had approached the RBI seeking a fit-and-proper assessment for the proposed acquisition.
“The RBI’s approval effectively removes the biggest regulatory overhang in the transaction. The resolution process can now move to the National Company Law Tribunal (NCLT) for final approval, bringing the acquisition a step closer to completion,” a person aware of the development said.
Areion Group declined to comment.
ET had first reported on February 10that Areion Group had emerged as the successful bidder for Aviom after secured lenders unanimously backed its resolution plan over a higher but conditional bid from Unity Small Finance Bank.
Areion’s unconditional Rs 936-crore offer is expected to result in a recovery of about 65% for Aviom’s lenders. Although Unity Small Finance Bank had submitted the highest bid of Rs 977.5 crore during the challenge auction, lenders opted for Areion’s proposal because it was unconditional and offered greater certainty of execution.
Separately, Areion Group has appointed Suresh Khatanhar as group chief executive officer. Khatanhar, the former deputy managing director of IDBI Bank, will lead the group’s strategy, business expansion and operations.
Aviom was admitted to the corporate insolvency resolution process by the RBI in February last year after the affordable housing finance company defaulted on its debt obligations.
The company’s troubles surfaced after auditors flagged discrepancies in its books, prompting investigations by the National Housing Bank (NHB). The housing regulator subsequently found that Aviom had overstated its mutual fund investments to inflate cash balances on its books. ET had first reported these developments in November last year, triggering wider regulatory scrutiny of the lender.
