Supersession of the Board of Directors and Appointment of Administrator – M/s Reliance Capital Ltd. – RBI Press Release 2021-2022/1272 dated 29.11.2021

Supersession of the Board of Directors and Appointment of Administrator – M/s Reliance Capital Ltd.

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of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of M/s Reliance Capital Ltd (RCL) in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious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. Shri Nageswar Rao Y (Ex-Executive Director, Bank of Maharashtra) has been appointed as the Administrator of the company under Section 45-IE (2) of the RBI Act. The Reserve Bank will 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. Reserve Bank will also apply to the NCLT, Mumbai for appointing the Administrator as the Insolvency Resolution Professional.

(Yogesh Dayal)
Chief General Manager

Press Release: 2021-2022/1272  dated 29.11.2021

 

RBI appoints an Advisory Committee to advise the Administrator of M/s Reliance Capital Ltd

The Reserve Bank of India, on November 29, 2021 has superseded the board of directors of Reliance Capital Ltd. and appointed Shri Nageswara Rao Y, ex-Executive Director, Bank of Maharashtra, as the Administrator. In exercise of powers conferred under section 45-IE (5) (a) of the RBI Act 1934, the Reserve Bank has constituted a three-member Advisory Committee to assist the Administrator in discharge of his duties. The members of the Advisory Committee are as follows:

  1. Shri Sanjeev Nautiyal, ex-DMD, State Bank of India

  2. Shri Srinivasan Varadarajan, ex-DMD, Axis Bank

  3. Shri Praveen P Kadle, ex-MD & CEO, Tata Capital Limited

It may also be mentioned that the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 provide for the concerned financial sector regulator appointing a Committee of Advisors to advise the Administrator in the operations of the financial service provider during the corporate insolvency resolution process.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/1285 dated 30.11.2021

 

Application for initiation of Corporate Insolvency Resolution Process (CIRP) against Reliance Capital Ltd. filed under the Insolvency and Bankruptcy Code, 2016

The Reserve Bank has today (December 02, 2021) filed an application for initiation of CIRP against Reliance Capital Ltd., under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019 (“FSP Insolvency Rules”) at the Mumbai Bench of the Hon’ble National Company Law Tribunal.

As per Rule 5 (b) (i) of the FSP Insolvency Rules, an interim moratorium shall commence on and from the date of filing of the application till its admission or rejection. The explanation to Rule 5 (b) provides that “interim moratorium” shall have the effect of the provisions of sub-sections (1), (2) and (3) of Section 14. Sub-sections (1), (2) and (3) of Section 14 of the IBC have been reproduced below:

“(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:

(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;

(b) transferring, encumbering, alienating or disposing off by the corporate debtor any of its assets or any legal right or beneficial interest therein;

(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(54 of 2002);

(d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.

(3) The provisions of sub-section (1) shall not apply to –

(a) such transaction as may be notified by the Central Government in consultation with any financial regulator;

(b) a surety in a contract of guarantee to a corporate debtor.”

 

Reserve Bank of India retains the Advisory Committee of Reliance Capital Ltd.

It may be recalled that, in exercise of powers conferred under Section 45-IE (5) (a) of the RBI Act, 1934, the Reserve Bank had, on November 30, 2021, constituted a three-member Advisory Committee to assist Shri Nageswara Rao Y, Administrator of Reliance Capital Ltd (RCL) in discharge of his duties. The members of the Committee are:

  1. Shri Sanjeev Nautiyal, ex-DMD, State Bank of India

  2. Shri Srinivasan Varadarajan, ex-DMD, Axis Bank

  3. Shri Praveen P Kadle, ex-MD & CEO, Tata Capital Limited

Upon admission of the petition for insolvency resolution process by the Mumbai Bench of the Hon’ble National Company Law Tribunal in respect of RCL vide order dated December 06, 2021, the Reserve Bank has decided that the above mentioned three-member Committee shall continue as the Advisory Committee under Rule 5 (c) of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019. The Advisory Committee shall advise the Administrator in the operations of RCL during the Corporate Insolvency Resolution Process.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/1319 dated 07.12.2021

 


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