Reliance Capital's Insolvency: NCLT Admits RBI's Application
The National Company Law Tribunal, Mumbai on Monday admitted the Reserve Bank of India's application initiating insolvency proceedings against Anil Ambani-owned Reliance Capital Ltd.
The bench, presided over by Pradeep Narhari Deshmukh and Kapal Kumar Vohra, confirmed Nageswar Rao's appointment as the administrator. It also affirmed the initiation of the moratorium period.
Appearing for the RBI, Senior Advocate Ravi Kadam informed the tribunal that on Dec. 2 Yes Bank Ltd. had intimated the regulator that the default amount in relation to Reliance Capital's 9,870 secured non- convertible debentures is Rs 987 crore, plus an interest of Rs 430 crore—a total of Rs 1,417 crore. The date of default was Oct. 13, 2019.
Yes Bank was a subscriber to the non-convertible debenture to the tune of Rs 987 crore, issued by the company on Oct. 30, 2017. The default occurred on the same after which all other events got triggered.Ravi Kadam, appearing for RBI
The bench also took note of Kadam's submission that there was no stay against the insolvency application and appointment of the administrator. And that the company's promoters supported RBI's insolvency application.
On Nov. 29, RBI superseded the board of Reliance Capital and appointed Rao, who is a former executive director of Bank of Maharashtra, as the administrator.
The regulator's action was prompted by "defaults by Reliance Capital in meeting the various payment obligations to its creditors and serious governance concerns which the board has not been able to address effectively".
The five-director company board is chaired by Anil Ambani and includes Chhaya Virani, Rahul Sarin and Thomas Mathew as independent directors; Chief Executive Officer Dhananjay Tiwari and Group President AN Sethuraman, according to information on its website.
The administrator has been directed to place the progress report before the tribunal on Feb. 21.