Reliance Capital says corporate insolvency resolution started against firm

Reliance Capital on Tuesday said the National Company Law Tribunal (NCLT) has admitted the case of the company for the corporate insolvency procedure.

Shares of the company declined by more than 4 per cent to trade at Rs 14.10 on BSE.

"Pursuant to order dated December 6, 2021 of the National Company Law Tribunal, Mumbai, corporate insolvency resolution (CRIP) has been initiated against Reliance Capital Ltd," the company said in a regulatory filing.

Nageshwar Rao Y has been appointed as the administrator of the company, via order dated December 6, 2021, it said further.

The National Company Law Tribunal (NCLT) on Monday admitted the Reserve Bank's plea to initiate insolvency resolution proceedings against Reliance Capital. The Reserve Bank of India (RBI) had filed an application for the initiation of Corporate Insolvency Resolution Process (CIRP) against the company last week.

The apex bank had superseded Reliance Capital's board, citing defaults and governance issues.

In a statement, the company's promoters said they support the RBI application of referring the company to the NCLT under section 227 for the fast track resolution.

Reliance Capital owes its creditors over Rs 19,805 crore, majority of the amount through bonds under the trustee Vistra ITCL India.

The company is the third NBFC to go for resolution under the IBC after Dewan Housing Finance (DHFL) and Kolkata-based Srei Group.