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ARTICLE · 12 MAY 2024

SEBIs Delisting Regulation: The Balancing Act With Insolvency Laws

Economic Laws Practice
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In an interesting turn of events, a writ petition has been filed before the Bombay High Court by an investor of Reliance Capital Ltd. (RCap) challenging Regulation 3(2)(b)(i) of SEBI...

IndiaAccounting and Audit
Jitendra Motwani
Jitendra Motwani
KC Jacob
KC Jacob
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In an interesting turn of events, a writ petition has been filed before the Bombay High Court by an investor of Reliance Capital Ltd. (RCap) challenging Regulation 3(2)(b)(i) of SEBI (Delisting of Equity Shares) Regulations, 2021 (Delisting Regulations) and the National Company Law Tribunal's (NCLT) approval of a resolution plan for RCap.

Background

In November 2021, the Reserve Bank of India (RBI) superseded the board of RCap and appointed an administrator and subsequently a corporate insolvency resolution process (CIRP) was initiated against RCap. On February 27, 2024, the NCLT, approved the resolution plan proposed by IndusInd International Holdings Limited (IIHL) which included delisting of the shares of RCap. Subsequently, both BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) issued circulars announcing the suspension of trading in the scrip of RCap.

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