Mumbai, Oct 15 : After IRDAI rejected Hinduja Group led IIHL's proposal to raise funds for the Reliance Capital acquisition by creating a pledge over the shares of Reliance General Insurance (RGIC) and Reliance Nippon Life Insurance (RNLIC), the Reliance Capital Administrator has written to the IIHL, raising questions on the source of funds and business plan. In a letter to IIHL, the Reliance Capital Administrator has asked the successful resolution applicant, IIHL to to share the final executed change in control application with the insurance companies, along with the source of funds and the business plan which do not contemplate the creation of pledge over the shares of RGIC and RNLIC, for onward submission to IRDAI. The Administrator has written to IIHL that in their meeting with the IRDAI on 9 October, IRDAI indicated that no application for change in control would be considered favourably if the source of the funds for the acquisition contemplates creation of pledge over the shares of an insurance company. The Administrator has further asked the IIHL that the company should submit a fresh application for change in control of the insurance companies (RGIC & RNLIC), along with the source of funds and the business plan which do not contemplate the creation of pledge over the shares of the RCAP insurance companies. Hinduja Group is raising a debt of $ 850 million from the leading foreign funds and banks to fund the acquisition of Reliance Capital Ltd. Hinduja Group proposes to raise this debt against the assets of Reliance Capital, which primarily includes Reliance Capital's 100 per cent stake in Reliance General Insurance and 51 per cent stake in Reliance Nippon Life Insurance. These two assets constitute more than 90 per cent of the value of Reliance Capital. IIHL had sought an approval from the Insurance Regulator for the change in control of the ownership of RGIC & RNLIC and creation of pledge over their shares to raise funds from the investors. The IRDAI approval is necessary for the completion of the successful resolution of Reliance Capital. JP Morgan, Barclays Bank, Brookfield, Cerberus Capital, Apollo - USA, and Oaktree-Singapore are some of the leading foreign funds & banks who IIHL has been in talks with for its $ 850 million fund raise. /IANS