Shares of Reliance Capital hit their 5 percent upper circuit of Rs 14.05 on BSE on December 30, a day after the company said IRDAI has cancelled pledge enforcement of Reliance General Insurance Company Ltd’s (RGICL) shares by Credit Suisse and Nippon India MF.
“The Insurance Regulatory and Development Authority of India (IRDAI), on December 27, 2019, has held that the pledge/transfer of shares of Reliance General Insurance Company Limited, a 100 percent subsidiary of Reliance Capital (RCAP), was in violation of the applicable provisions of law,” the company said in a media release on December 29.
Pursuant to IRDAI direction, the 100 percent shareholding RGICL stands restored to RCAP. IRDAI directed trustee not to give effect to any encumbrance or transfer or any change in the Shareholding of the RGICL, the media release added.
In November 2019, the trustee had transferred RCAP’s 100 percent shareholding in RGIC by invoking pledge, which was being contested by the company.
The company further said that the IRDAI ruling has protected the interest of all lenders and debenture holders of RCAP. This will now help RCAP to monetise its stake in RGIC and to reduce its debt. The company will continue its efforts to monetize its shareholding in RGICL as part of its overall plans for debt reduction.
Shares of Reliance Capital was up 4.10 percent at Rs 13.95 on BSE around 12:10 hours IST.
News Source:- Moneycontrol