January 21, 2025

‘IndusInd’s resolution plan for Reliance Capital can’t drop Reliance General Insurance’s employee stock ownership plans’

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MUMBAI: Reliance General Insurance has obtained a legal opinion that states IndusInd Holding’s resolution plan cannot extinguish any stock options or other employee benefits.
IndusInd International Holdings has emerged as the successful bidder for Reliance Capital. RCap‘s most valuable holdings are the shares it owns in its 100% subsidiary Reliance General Insurance.
IndusInd Holding’s resolution plan involves raising funds to pay creditors of Reliance Capital by creating a charge on the shares of Reliance General Insurance. Previously, the insurance regulator had objected to such a funding proposal.
The fact that Reliance General has sought a legal opinion indicates that the management opposes the new promoters extinguishing ESOPs (employee stock ownership plans) or other employee benefits to enhance the value of their holdings in the life insurance company. The legal opinion provided by Khaitan & Co cited several judgments in their opinion.



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