Another Anil Ambani-controlled company has tumbled down. The Reserve Bank of India (RBI) on Monday said it has  superseded the board of Reliance Capital due to serious governance issues and defaults on various payment obligations to its creditors.

The Ambani-promoted company will soon go under the insolvency process. The RBI has appointed former Bank of Maharashtra director Y Nageswar Rao as the administrator of the company.

"In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of M/s Reliance Capital Ltd (RCL) in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious governance concerns which the Board has not been able to address effectively," RBI said in a statement.

The central bank said it will shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy code (IBC). It will also apply to the National Company Law Tribunal (NCLT) for appointing the administrator as the Insolvency Resolution Professional. 

Reliance Capital will join other non-banking financial companies (NBFCs) like DHFL and Srei Group where the RBI superseded boards and they were brought under the insolvency procedure.

 Reliance Capital, a part of Anil Dhirubhai Ambani Group, has repeatedly failed to repay its debt obligations to lenders or bondholders. It has a ‘D’ or default rating.

 Reacting to the RBI’s action, Reliance Capital said, despite its best efforts for the past over 2 years, resolution of the company's debt was stalled due to complex litigations.

 The complexity of litigation initiated by certain secured and unsecured lenders, resulting in the pendency of over 10 cases in various courts has effectively stalled the resolution of the Company’s debt," Reliance Capital said in a stock exchange filing. 

 The company said it owns profitable and valuable operating businesses, through its 100% shareholding in RGIC and 51% shareholding in RNLIC (a JV with global leader, Nippon Life Co. of Japan), which represent the majority of the value of the company being a Core Investment Company (CIC), besides other financial investments.

Reliance Capital further said it has no outstanding loans from banks and approximately 95% of its debt is in the form of debentures.

The company looks forward to expeditious resolution of its debt and continuation as a well capitalised going concern through the IBC process, in the overall interests of all its stakeholders, including lenders, customers, employees and shareholders."