The Reserve Bank of India said on Monday it will initiate bankruptcy proceedings against Reliance Capital Ltd and superseded the non-banking financial company's board on governance concerns.
The Reserve Bank of India (RBI) appointed Nageswar Rao Y, a former executive director at Bank of Maharashtra Ltd, as the administrator of Reliance Capital.
In June 2019 auditors raised several red flags around Reliance Capital's fourth-quarter results, including a lack of clarity in accounting methodology.
The company has since then failed to make several debt obligation payments.
The RBI's move against Reliance Capital follows a similar step taken against Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd earlier this year.
Reliance Capital did not immediately respond to a request for comment.