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IRDAI restores Reliance Capital’s 100% shareholding in Reliance General Insurance

NEW DELHI: Reliance Capital on Sunday informed stock exchanges that IRDAI has cancelled the pledge enforcement of shares of Reliance General Insurance by Credit Suisse and Nippon India MF.

With this, IRDAI has restored 100 per cent shareholding in Reliance General Insurance to Reliance Capital.

IRDAI directed IDBI Trusteeship Services (Trustee) not to give effect to any encumbrance or transfer or any change in the shareholding the general insurance firm.

IRDA said that its prior approval was not taken for the transfer and that the enforcement of pledge is null and void and not in accordance with law. IRDA has directed Reliance General Insurance to not give any effect to the unauthorised transfer.

Reliance Capital insists that IRDA action will benefit all of its lenders, as the sale proceeds of Reliance General Insurance shares will go to all of them and not just Credit Suisse and Nippon MF.

The sale of Reliance General Insurance shares is expected to fetch Rs 6,000 crore for Reliance Capital lenders, which is almost 40 per cent of total the company’s secured debt

In November, the Trustee had transferred Reliance Capital’s 100 per cent shareholding in Reliance General by invoking pledge, which was being contested by the company.

“This will now help RCAP to monetise its stake in RGIC and to reduce its debt. The company will continue its efforts to monetise its shareholding in RGICL as part of its overall plans for debt reduction,” Reliance Capital said in a filing to BSE.

Source: Economic Times