The Reserve Bank of India (“RBI”) a, in its capacity as regulator of non-bank financial companies and by virtue of the powers conferred on it under Article 45-IE (1) of the Reserve Bank of India Act, 1934 (“RBI Law”), replaced the Board of Directors of SIFL and SEFL.
The same-date RBI press release also states the following:
1) The measure was taken because of governance issues and the failure of SIFL and SEFL to meet their various payment obligations.
2) Shri Rajneesh Sharma, ex- Chief Executive Officer, Baroda Bank was appointed director of SIFL and SEFL under article 45-IE (2) of the RBI law.
3) The RBI also intends to initiate shortly the resolution process of SIFL and SEFL under the insolvency and bankruptcy rules (insolvency and liquidation proceedings of financial service providers and application to the awarding authority), 2019.
4) The RBI would also apply to National Court of Company Law for appointing the administrator as an insolvency resolution professional.
The Piramal Group recently completed its acquisition of Dewan Housing Finance Limited. It was the largest recovery of distressed assets and the first successful resolution of a financial services company under the Insolvency and Bankruptcy Code of 2016 (as amended).
Originally published October 4, 2021.
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