RBI supersedes Reliance Capital board; to start insolvency proceedings

0 48

The Reserve Bank of India (RBI) on Monday said it has superseded the board of Reliance Capital in view of the defaults by the non-banking finance company (NBFC) in meeting its payment obligations to creditors and serious governance concerns which the board of the company has not been able to address effectively.

Further, the regulator said, it will shortly initiate insolvency proceedings against the NBFC under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.

It will also apply to the Mumbai bench of the National Company Law Tribunal (NCLT) to appoint the administrator as the insolvency resolution professional. Nageswar Rao, former executive director, Bank of Maharashtra, has been appointed as the administrator of Reliance Capital.

This is the third instance of RBI initiating insolvency proceedings against a NBFC, the first being Dewan Housing Finance Limited (DHFL), followed by Srei Group entities.

Reliance Capital is a diversified NBFC, promoted by Anil Dhirubhai Ambani Group.

In June 2019 auditors raised several red flags around Reliance Capital’s fourth-quarter results, including a lack of clarity in accounting methodology.

The company has since then failed to make several debt obligation payments.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor


You might also like
Leave A Reply

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More