The system envisaged under the FRDI Bill, if implemented properly, would help improve the efficiency of capital allocation without harming consumers, and without risking the stability of financial firms, says Ajay Shah.
To minise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies, she said.
The statement, issued after the 2-day meeting of the 6-member Monetary Policy Committee of the Reserve Bank of India, also said that recapitalisation of public sector banks along with resolution of stressed assets under the Insolvency and Bankruptcy Code (IBC) will create demand for fresh investments.
63 Moons Technologies that has a claim of Rs 200 crore from Dewan Housing Finance, which is being taken over by the Piramal Group for as low as Rs 37,500 crore against a total claim of close to Rs 85,000 crore, on Tuesday said it will challenge the resolution at the NCLAT shortly. On Tuesday, making an about-turn, the Mumbai bench of the National Company Law Tribunal (NCLT) chaired by HP Chaturvedi and Ravikumar Duraisamy, allowed Piramal Group to take over DHFL under the bankruptcy code for as low as Rs 37,500 crore against a claim of close to Rs 85,000 crore. It had on May 25 asked the committee of creditors to consider the Wadhawans offer of paying back almost Rs 93,000 crore to the lenders and creditors, which was stayed by the NCLAT after the Pirmal group challenged it.
This pertains to certain irregularities in loan disbursements towards the development of two Slum Rehabilitation Authority projects undertaken by the company in the past.
Banks might not have realised the exact implication of risky projects under PPP projects, which were getting implemented under high leverage
The Reserve Bank on Monday superseded the boards of Srei Infrastructure Finance as well as Srei Equipment Finance, citing concerns over governance and payment defaults, and decided to refer the two NBFCs for resolution under the insolvency law. This is only the second time in as many years that the Reserve Bank of India (RBI) is referring entities for the resolution process under the Insolvency and Bankruptcy Code (IBC) after taking first ever such step in the case of DHFL back in 2019. Superseding the boards of the crisis-hit Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL), the RBI has appointed Rajneesh Sharma, former Chief General Manager of Bank of Baroda as the administrator to manage the affairs of the two companies.
Sources said much has been done to ease the tax burden of the middle classes in the last five years, and that such a measure affects only a limited segment of people when the focus should be to put money in rural areas. Archis Mohan reports.
The Insolvencies and Companies Court of London high court on Monday declared fugitive business baron Vijay Mallya a bankrupt person as per UK laws. Legal experts explain what this means for 65-year old Mallya's personal liberties, his legal battle against extradition to India to face trial, and for the consortium of Indian lenders - at whose behest the bankruptcy proceedings were initiated in the UK courts.
Experts consider Sebi's takeover code in its present form to be on a par with any foreign code governing public mergers and acquisitions.
Future Retail's independent directors had last week asked Amazon if it was willing to give a long-term loan to avoid default on repayment of Rs 3,500 crore loan due on January 29. Amazon replied to that saying it was willing to financially assist Future Retail through the Samara Capital deal but the retailer must shelve Rs 24,713 crore deal with the Reliance group.
'For a responsible person like him to utter such nonsense is shameful.' 'He is not fit to be a director on the RBI central board.'
An employees' consortium has demanded that the Committee of Creditors should look at providing one month's salary as an interim financial assistance.
Lenders can now review a borrower account within 30 days of default. Earlier, the banks had to start resolution within one day of default.
A lot depends on how Srei shapes up under the new administrator and his team, which is critical for investors' interest.
The Kalrock-Jalan consortium - new owners of Jet Airways - has got an assurance from around 30 airports that if the airline restarts operations, 170 pairs of slots can be made available. However, whether those slots will be according to the airline's demand will depend on the order of the insolvency court, which is slated to come next week. Sources said the new management feels it is extremely important that some of those slots are restored or else its business plan of operating Jet as a premium carrier will not be viable.
Celebrated Indian woman boxer L Sarita Devi comfortably outpunched Zsofia Bedo of Hungary to make a winning start to her professional career in the IBC Fight Night at the at the Khuman Lampak Stadium, in Imphal on Sunday.
'One of the ways to do that is to ensure that NBFCs have got liquidity.' 'If we don't do that, this mood of gloom will continue.' NBFCs need to be provided with liquidity if they have to start lending.
Prime Minister Narendra Modi on Thursday said his government is using all channels including diplomatic to bring back high-profile economic offenders, leaving them with no option but to return to the country. Speaking at a symposium on credit flow and economic growth, he asked banks to support wealth and job creators with proactive lending while promising to stand by any loans given in right earnest. "In our attempt to bring back fugitive (economic offenders), we relied on policies and law and also used diplomatic channels.
A lack of adequate disclosures raises the financing costs of corporate firms, especially sub-investment grade ones, and keeps the capital markets small, believes RBI deputy governor Viral Acharya.
After the Insolvency and Bankruptcy Code came into force, which calls for an auction of assets of loan defaulting entities, recoveries have picked up, said Jaitley.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries
In 2009, ArcelorMittal had picked up a stake in Uttam Galva Steels. A new Section 29A of the IBC prohibits promoters of companies with NPAs of more than a year from bidding for these companies.
It will bear fruit in the next five years, which is why FDI is so strong. The foreigners clearly know what Indians don't, asserts T C A Srinivasa-Raghavan.
Maximum promoter holding to be eligible for reclassification to be raised from 10% to 15%; waiting time to be brought down to one month from three.
It had been pointed out to the banking regulator that one-day default was difficult to monitor in large companies, especially where cash flows are dependent on government payments.
Jalan Kalrock Consortium, the winning bidder for the grounded Jet Airways, will make a total cash infusion of Rs 1,375 crore in the airline and lenders will take a steep haircut on their admitted claims of over Rs 7,800 crore under the approved resolution plan. The National Company Law Tribunal (NCLT) on June 22, approved the consortium's resolution plan for Jet Airways, which has been undergoing insolvency resolution process since June 2019. The carrier shuttered operations in April 2019.
The infra-major going belly up cracked open some major flaws in the system - the most evident being weak corporate governance and how layers of corporate structures could be formed adding to the opaqueness of the group.
The denial came after several TV channels reported that the couple was likely to tie the knot between December 11-13 in Milan.
A source said that the lenders have proposed to change the management of the beleaguered air carrier as they feel it is not possible to run the company with present management.
US-based Oaktree on Monday pipped Piramal Enterprises and Adani Group to emerge as the highest bidder for DHFL after fresh bids were invited under the insolvency process, according to sources. The committee of creditors had fixed December 14 as the last for submission of revised bids. According to the sources, Oaktree raised the bid to Rs 36,646 crore, including Rs 1,000 crore for insurance and Rs 3,000 crore of interest earned, while Piramal Enterprises offered Rs 35,550 crore, including Rs 300 for insurance and Rs 3,000 of interest earned.
With Indian infrastructure companies burdened with debt, global PE funds and developers sense an opportunity to buy the airports cheap
The Mumbai Bench of the National Company Law Tribunal (NCLT) on Monday approved Piramal Group's resolution plan for the beleaguered Dewan Housing Finance Ltd (DHFL), which has been reeling from the insolvency process since 2019. The plan put forward by Piramal Group, which has offered to pay Rs 37,250 crore, has been approved by the committee of creditors (CoC), the Reserve Bank of India (RBI), and the Competition Commission of India (CCI).
'Some business families would probably have to revert to their core businesses, which the IBC will ensure.'
According to the revised plan, promoter Naresh Goyal, his wife Anita Goyal and the directors nominated by the promoter would be asked to step down from the board, and the lenders, as part of the resolution process, will infuse around Rs 1,200 crore into the airline as emergency funding.
With the amendment, firms like EY and Deloitte can work as resolution professionals instead of only their partners enrolling as insolvency professionals.
However, the tribunal rejected the plea by the Netherlands based vendors for filing an intervention application, saying the Dutch district court had no jurisdiction to order bankruptcy of Jet Airways.
The two boxers, who had signed up with the Indian Boxing Council (IBC), will be re-joining the national camp after submitting letters of apology to the Boxing Federation of India (BFI) for abruptly leaving the amateur circuit.
The three companies for sale are Reliance Communications, Reliance Telecom and Reliance Infratel.
Of the 40 CEOs polled from across the country, 60 per cent identified a fractured electoral mandate as a bigger risk than trade wars, volatile oil prices, and inflation.
