New Delhi: The Reserve Bank of India (RBI) on Monday superseded the board of Reliance Capital due to the company’s default in meeting various payment obligations.
Nageswara Rao Y (Former Executive Director, Bank of Maharashtra) has been appointed as the Administrator of the company.
“In exercise of the powers conferred under Section 45-IE(1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of M/s Reliance Capital Limited (RCL) in view of the default by RCL to its creditors. in meeting various payment obligations and serious governance concerns, which the Board has not been able to effectively address,” the RBI said in a statement.
The Reserve Bank will soon initiate the resolution process of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to the Adjudicating Authority) Rules, 2019.
Reliance Capital has a total debt of Rs 21,781.01 crore, which includes interest accrued till October 31, 2021 and default on servicing of Rs 5.48 crore on term loans of Rs 624.61 crore.
The Reserve Bank will soon initiate the process of resolution of the company under the Insolvency and Bankruptcy Rules, 2019. The central bank will also apply to the NCLT, Mumbai bench to appoint an administrator as insolvency resolution professional.
A Reliance Capital spokesperson was not immediately available for comment.
“Delay in loan repayment is on account of settlement, alienation, forfeiture of part, directly or indirectly or otherwise, with the Company to make any payment to secured or unsecured creditors and possession of any assets except in the ordinary course of time, salary and statutory dues. Payment of amount, Orders passed by Hon’ble Debt Recovery Tribunal, dated 3rd December, 2019, and 5th December, 2019, dated 20th November, 2019, and 15th March, 2021. Hon’ble Delhi High Court, and dated 28th March, 2021 The orders dated November, 2019, November 4, 2020 and March 5, 2021, were passed by the Hon’ble Bombay High Court. In view of the above, the Company is unable to proceed with its debt servicing as a result of asset monetization,” the company said in a regulatory filing to the exchanges.
Shares of Reliance Capital closed 4.99 per cent lower at Rs 19.05 on the BSE on Monday in a firm Mumbai market, valuing the company at Rs 481 crore.
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