In a reversal of its stand in the ongoing matter related to the pledging of shares of Reliance General Insurance Company by Reliance Capital, the Insurance Regulatory and Development Authority of India (IRDAI) has asked IDBI Trusteeship Services to comply with the relevant insurance regulations if there is any change in ownership of the shares of the general insurance company.This assumes significance as the insurance regulator had earlier directed the trustee firm to transfer the shares back to Reliance Capital after declaring the pledge ‘null and void ab initio’, a decision that was challenged by Nippon India Mutual Fund at the Securities Appellate Tribunal (SAT).“It is hereby advised that as and when any transfer of the said shares is contemplated, it should be ensured that the provisions of Section 6A4(b) of the Insurance Act, 1938, read with Regulation 3 of IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations 2015 are complied with,” stated a letter by the IRDAI to IDBI Trusteeship Services.These regulations require the entities to inform whether they are acquiring shares for themselves or some other entity and whether the holding would breach certain threshold limits as set by the insurance laws.IDBI Trusteeship is holding the pledged… Read full this story
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