NCLT Admits RBI Plea To Initiate Bankruptcy Proceeding Against Anil Ambani-Owned Reliance Capital
National Company Law Tribunal (NCLT), on Monday, accepted a petition filed by the Reserve Bank of India (RBI) seeking to declare Reliance Capital, Anil Ambani controlled financial service company, bankrupt.
The RBI approached the Mumbai bench of NCLT on December 2, seeking the acceptance of its plea. The move comes days after the RBI superseded Reliance Capital's board of directors on November 29 since the company failed to satisfy its payment commitments. Subsequently, RBI set an advisory committee to advise the administrator of Reliance Capital.
The committee members include Sanjeev Nautiyal, ex-DMD of SBI; Srinivasan Varadarajan, ex-DMD of Axis Bank; and Praveen P Kadle, ex-MD & CEO of Tata Capital Limited.
Answering the development, Reliance Capital has called it a welcoming step as the RBI's move to resolve debt is "in accordance with IBC". Further, the company has assured to fully cooperate with the central bank-appointed administrator for a speedy resolution.
"The complexity of litigation initiated by unsecured, some secured lenders have effectively stalled resolution of debt over the past two years. The company has no outstanding loans from banks; 95% of debt is in the form of debentures," it said in a statement.
In November 2020, Reliance Capital had informed the bourses that it had failed to pay interest payments on loans drawn worth Rs 4.77 crore and Rs 0.71 crore from Housing Development Finance Corporation (HDFC)and Axis Bank, respectively.
The term loan taken from HDFC was for six months to seven years at a rate of 10.6-13 percent, whereas Axis Bank gave the term loan for three to seven years at an interest rate of 8.25 percent.