Mumbai: The sale of Reliance Capital’s (RCAP) 51 per cent stake in Reliance Nippon Life Insurance coverage Firm (RNLIC), within the ongoing Company Insolvency Decision Course of, has pitched Nippon Lifetime of Japan in opposition to RCAP Administrator and Aditya Birla Solar Life Insurance coverage.
Miffed on the entry of Aditya Birla Solar Life within the bidding technique of RNLIC, and that too so near the binding bids submission deadline, Nippon Life, a 49 per cent stakeholder in RNLIC, has made it clear to the Administrator and Aditya Birla Solar life that it’s not taken with merging with Aditya Birla Insurance coverage or promote its stake, at any value.
A supply near the event revealed that Nippon Life – Japan has communicated its resentment and reservations to the RCAP Administrator, Aditya Birla Solar Life and its overseas companion, Solar Life Monetary Inc.
Nippon Life is eager on buying RCAP’s 51 per cent stake in RNLIC, by means of a strategic companion, as Indian Insurance coverage guidelines don’t permit a overseas firm to have an fairness stake of greater than 74 per cent in an Indian Insurance coverage entity.
The sources revealed that the entry of Aditya Birla Solar Life appears to have upset the plans to Japnese Insurance coverage main. In case Birla Solar Life succeeds in buying 51 per cent stake of RCAP in RNLIC, it must merge the RNLIC with its present insurance coverage firm i.e. Birla Solar Life Insurance coverage, as a result of IRDA pointers of no cross holding being allowed between the 2 insurance coverage firms.
In case of merger of RNLIC with Birla Solar Life, Nippon Life’s stake could be vastly diluted to under 10 per cent within the merged entity, and it will lose all of the shareholder and the governance Rights that exist by way of nominating the CEO, equal illustration on the Board, member of the audit committee, and the Veto rights on the reserved issues, within the RNLIC.