Trinity Alternative Investments denies illicit transactions with Srei Group entities

Trinity Alternative Investment Managers, majority-owned by Srei Infra Finance denied accusation of illicit transactions with any Srei Group entities. Trinity is undergoing RBI-mandated insolvency proceedings and the RBI-appointed administrator Rajneesh Sharma moved the Kolkata bench of the National Company Law Tribunal (NCLT) to include around Rs 8,400 crore loans that Srei group entities have extended to 20 of the 50 investee companies of Trinity, under the ongoing insolvency proceedings.

On October 4, 2021, the Reserve Bank of India superseded the boards of the group firms; Srei Infra Finance and Srei Equipment Finance. These companies were then referred to NCLT for insolvency proceedings.

The Srei group launched Trinity as a Sebi-registered AIF in 2005 and in mid-2020, sold 49 per cent stake to the Singapore based fund Payaash Capital. As an asset manager, Trinity manages around Rs 1,475 crore, which is invested between 50-odd companies.

Payaash Capital is represented at Trinity by Uttam Prakash Agarwal.
Speaking to PTI, Agarwal denied any illicit transactions between the fund and Srei Group entities. “I’ve asked Trinity and the board to share all information being sought by the administrator,” he said. Agarwal claimed that there is absolutely no related-party transactions between Srei group entities and Trinity and its investee firms. He also mentioned that one of the key conditions that Payaash Capital insisted was to have an independent board that is why Srei group chose to stay out of the board despite being the majority stakeholder. Payaash Capital has appointed an auditor to study the investment position, after the administrator sought details ” he said.

Since its inception in 2005, Trinity has invested around Rs 8,000 crore and have returned over Rs 5,500 crore to its investors. Currently, Trinity manages 10 funds having a total of Rs 1,475 crore equity exposure to about 50 entities. As per Shilpa Modi, Senior Vice President of Trinity, of the current corpus, Rs 100 crore is contributed by Srei.

The administrator has alleged that Srei entities have lent Rs 8,400 crore to these companies and in some of them, Srei promoter entities have economic interest. Besides, some of the funds under Trinity raised money by issuing units to Srei companies. This inter-linked transaction makes Trinity an important piece in the resolution of Srei companies, according to the administrator.

Trinity claims that none of the extant rules define related-party transactions when it comes to Alternative Investment Funds and that Srei group, despite owning 51 per cent stake, does not have a board representation since the entity is only an asset manager. So, such charges are nothing but absurd.

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