RBI Approves Hinduja Group Directors On Reliance Capital Board

The Reserve Bank of India (RBI) has given an approval for five Hinduja Group representatives as directors on the board of Reliance Capital, where insolvency proceedings are undergoing.

Sources have said that the directors are Shardchandra V Zaregaonkar, Amar Chintopanth, Bhumika Batra, Moses Newling, Harding John and Arun Tiwari.

The approval by RBI has come along with its 'no-objection' for IndusInd International Holdings (IIHL) Rs 10,000 crore resolution plan for the bankrupt Reliance Capital and the proposed transfer of control of the company to IIHL BFSI which is a wholly owned subsidiary of IIHL.

The RBI has also maintained that while following the change of control and management, the company will have to demonstrate a strict arm's length distance with respect to any kind of transaction with the IndusInd Bank, which is owned by the Hinduja Group.

It is also said that after the implementation of the resolution plan(RP), any change with regards to the shareholding will be subject to the prior approval of the RBI.

RBI has directed that a copy of the order pronounced by the National Company Law Tribunal (NCLT) approving the IIHL's resolution plan will also have to be submitted to the bank.

The NCLT’s approval for IIHL's resolution plan is still pending in the Supreme Court, as SC is yet to decide on the matter related to the Torrent Investment's plea against the second round of auction held by the for the lenders of Reliance Capital.

A hearing on Torrent's plea in the Supreme Court is going to be held this week. Torrent happens to be the highest bidder in the first round.