The National Company Law Tribunal has admitted the application by the Reserve Bank of India to initiate insolvency proceedings against Reliance Capital. The matter was heard by the Mumbai Bench of the NCLT on Monday.

The NCLT also approved the appointment of Y Nageswara Rao as the Administrator of the company.

The RBI, on December 2, had filed an application for initiating insolvency proceedings against Reliance Capital at the Mumbai Bench of the NCLT.

It had previously superseded the board of the troubled company on November 29 and appointed Y Nageswara Rao, former Executive Director, Bank of Maharashtra, as the Administrator of the company.

Total indebtedness

Reliance Capital, in a statement, said it supports the RBI application of referring the company to NCLT under section 227 for fast-track resolution.

“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,” it said.

The total indebtedness of Reliance Capital including short term and long-term debt was ₹21,781.01 crore as on October 31, 2021. It has 20 subsidiaries including step-down subsidiaries and five associates. It reported a consolidated net loss of ₹1,156 crore in the quarter-ended September 30, 2021.

Reliance Capital’s scrip closed 4.82 per cent lower on the BSE at ₹14.8. The company is the third NBFC against which the RBI has initiated insolvency proceedings, following Dewan Housing Finance Corporation and two Srei group firms.

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