Key Points
In a letter to the administrator of Reliance Capital (RCap), IRDAI said it cannot undertake due diligence regarding acquisition of the distressed financial services company's insurance business by Hinduja-owned IndusInd International Holdings Limited (IIHL), unless it is provided with detailed information about the acquirer's ultimate primary shareholder, its source of funds, and capital structure...
Dated March 20, the letter by the Insurance Regulatory and Development Authority of India (IRDAI) was in response to a request by administrator Nageswara Rao Y to approve the transfer of RCap's shares in three insurance companies to Aasia Enterprises LLP, another Hinduja group company...
In February, the National Company Law Tribunal (NCLT) had approved a 9,661-crore resolution plan by IIHL, Aasia Enterprises LLP and IIHL BFSI (India) Ltd for the previously Anil Ambani-owned RCap...
The insurance regulator asked the RCap administrator to furnish the structure of borrowing and instrument details as well as provide clarity on how Aasia Enterprises will be able to meet future capital requirements of insurance companies...
It also raised concern over a proposed borrowing and a plan to pledge part of shares of Aasia Enterprises, RCap and IIHL (BFSI), indicating that borrowing and pledging of shares to acquire stake in the insurance business violated guidelines..
