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The Reserve Bank approved the resolution plan for Anil Ambani’s debt-ridden company Reliance Capital. The Reserve Bank’s move clears the way for the takeover of Reliance Capital by Hinduja Group company IndusInd International Holdings Limited (IIHL). Meanwhile, Reliance Capital’s trading has been banned once again. Trading restricted message appears on BSE index.
What the company said: Anil Ambani’s company Reliance Capital told the stock market that the administrator has received “no objection” from the Reserve Bank of India through a letter dated November 17, 2023. Let us tell you that in the second round of auctions held in April, Hinduja Group’s IIHL to acquire debt-ridden Reliance Capital for Rs. emerged as the highest bidder with an offer of Rs 9,650 crore.
Dissolution of the Board in 2021: The Reserve Bank of India dissolved the board of Reliance Capital on November 29, 2021, citing payment defaults and serious governance issues. The Reserve Bank appointed Nageswara Rao Y as administrator in connection with the corporate insolvency resolution process (CIRP) of the firm. In February last year, the RBI-appointed administrator had invited expressions of interest for the sale of Reliance Capital.
Reliance Capital is the third major non-banking financial company (NBFC) against which the central bank has initiated insolvency proceedings under the Insolvency and Bankruptcy Code (IBC). Apart from this two others were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).