Irdai restores Reliance Capital's 100% shares in Reliance General Insurance

The 100 per cent shareholding of RGICL is held by Reliance Capital.

Reliance Capital on Sunday said the Insurance Regulatory and Development Authority of India has cancelled pledge enforcement of Reliance General Insurance Company Ltd's (RGICL) shares by Credit Suisse and Nippon India MF.

Insurance regulator Irdai has directed IDBI Trusteeship Services not to give effect to any encumbrance or transfer or any change in the shareholding of RGICL, according to a BSE filing by Reliance Capital (RCAP).

Pursuant to the Irdai direction, 100 per cent shareholding in RGICL stands restored to RCAP, it added.

The regulator also said its prior approval was not taken for the transfer. The Irdai added that the unauthorised transfer also violates FDI regulations.

The Irdai action will benefit all lenders of Reliance Capital as sale proceeds of RGICL's shares will go to all lenders and not just Credit Suisse and Nippon India MF.

The sale of RGICL's shares is expected to fetch Rs 6,000 crore for RCAP lenders, which is almost 40 per cent of the total RCAP secured debt.

The 100 per cent shareholding of RGICL is held by Reliance Capital.

In November 2019, the IDBI Trusteeship had transferred RCAP's 100 per cent shareholding in RGIC by invoking pledge, which was contested by the company, RCap said in a statement.

The company will continue with its efforts to monetise its shareholding in RGICL as part of its overall plan for debt reduction, the statement added.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel