Reliance Capital: NCLT admits RBI plea to begin insolvency proceedings

The National Company Law Tribunal (NCLT) on Monday admitted the petition moved by the RBI to provoke insolvency proceedings in opposition to Reliance Capital (RCL) underneath the Insolvency and Bankruptcy Code (IBC).
The NCLT’s Mumbai bench additionally confirmed the appointment of Y Nageswar Rao because the administrator of the corporate.
RCL mentioned it helps the Reserve Bank of India (RBI) utility of referring the corporate to the NCLT underneath Section 227, for the fast-track decision. “The company looks forward to expeditious resolution of its debt and continuation as a well-capitalised going concern through the IBC process, in the overall interests of all its stakeholders, including lenders, customers, employees and shareholders,” RCL mentioned.
The RBI had outmoded the board of administrators of RCL, belonging to the Anil Ambani group, in view of the defaults by RCL in assembly numerous fee obligations to its collectors and severe governance issues which the board has not been in a position to handle successfully. RCL owes Rs 21,781.01 crore, together with curiosity, as on October 31, 2021 to lenders.
This is the third time in recent times the RBI has outmoded boards and initiated insolvency proceedings in opposition to main NBFCs.