The Reserve Bank of India (RBI) has approved the appointment of five Hinduja Group representatives as directors on the board of the debt-ridden Reliance Capital, according to sources.
The RBI’s approval for the appointment of directors has come amid its no objection to the transfer of control of Reliance Capital Ltd to IIHL BFSI (India) Ltd (wholly owned subsidiary of Hinduja Group firm IndusInd International Holdings Ltd (IIHL).
While granting the approval on the Rs 10,000 crore resolution plan and appointment of the directors, the RBI has stipulated that pursuant to the change of control and management, the company will maintain strict arm's length distance with respect to any transaction with the Hinduja group-run IndusInd Bank.
The RBI has also said that after the implementation of the resolution plan, any change in the shareholding of resolution applicant will be subject to the prior approval of the central bank.
The RBI has also directed that a copy of the National Company Law Tribunal (NCLT) order approving the IIHL's resolution plan will have to be submitted to the bank.
The NCLT approval on IIHL's resolution plan is still pending as the Supreme Court is yet to decide on the Torrent Investment's plea against the second round of auction held by the lenders of Reliance Capital.
A hearing on Torrent's plea in the Supreme Court is scheduled for this week. Torrent was the highest bidder in the first round.