RBI supersedes board of Reliance Capital
The Reserve Bank of India (RBI) on Monday superseded the board of Anil Ambani’s Reliance Capital Ltd (RCL).
The central bank said it has taken the decision “in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious governance concerns which the board has not been able to address effectively”.
The RBI has appointed Nageswar Rao Y, former executive director of Bank of Maharashtra, as the administrator of the company.
The central bank also said that it would shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and accordingly also apply to the National Company Law Tribunal (NCLT), Mumbai, for appointing the administrator as the insolvency resolution professional.
Reliance Capital has interests in life, general and health insurance; commercial & home finance; equities and commodities broking; wealth management services; distribution of financial products; asset reconstruction; proprietary investments and other activities in financial services.
On a consolidated basis, RCL reported a net loss of Rs 1,156 crore for the quarter ended September 30, 2021 compared to a net loss of Rs 2,577 crore during the same quarter of the previous year. Much of the loss came from ‘finance and investments’ and ‘commercial finance’ divisions.
The balance sheet of RCL pegs its total financial liabilities at Rs 79,031 crore as of September 30, 2021 and non-financial liabilities to the tune of Rs 2,085 crore.
The group has total financial assets to the tune of Rs 61,577 crore as on September 30, 2021 and non-financial assets of Rs 6,606 crore.