Monsoon Session: IBC, GST changes, fugitive Bill top agenda, if Opposition allows
Even as political tensions are peaking in the run-up to next year’s general elections, Prime Minister Narendra Modi on Tuesday sought cooperation from Opposition parties for the smooth functioning of the monsoon session of Parliament. In all, the House will consider for passage 43 Bills including amendments to the Insolvency and Bankruptcy Code to recognize home-buyers as financial creditors and the Fugitive Economic Offenders Bill that seeks to make it easier to attach assets of offenders fleeing the country to escape the reach of the law even before conviction. The government has to get Parliament’s approval for both the Bills, provisions of which are already in force thanks to ordinances issued.
Insolvency process: Videocon lenders’ claims at Rs 59,000 crore
Lenders to the bankrupt Videocon Industries, which was admitted by the National Company Law Tribunal (NCLT) for insolvency proceedings in early June, have submitted claims close to Rs 59,000 crore. The tribunal has so far accepted claims worth Rs 57,000 crore. The company reported a net loss of Rs 2,709 crore on net sales of Rs 13,743 crore in FY17, which was a 15-month period following a change in the financial year-end from December to March. Financial creditors of Essar Steel have filed claims worth Rs 54,917 crore, while those for Bhushan Steel had submitted claims worth Rs 56,079 crore, data from the companies’ websites showed.
Bhushan Power Case: Wait till we rule on IBC – Supreme Court to NCLT
Even as the government has stood firm on resisting a call for easing the exclusion norms under the insolvency resolution process to retain its integrity — the latest amendments to the Insolvency and Bankruptcy Code (IBC) have only buttressed these checks — the Supreme Court has admitted a frontal challenge to the code by the promoters of Bhushan Power and Steel (BPSL) and ordered that the National Company Law Tribunal (NCLT) will not approve the bidder for the company without its permission. In what could boost hopes for litigants aggrieved of the IBC’s basic tenets, the court also clubbed a clutch of cases of similar nature including a petition by operational creditors to Binani Cement disputing the code’s constitutional validity for joint hearing.
Huge write-off: Banks to take 92% haircut in Adhunik Metaliks case
Lenders to Adhunik Metaliks (AML) will take a haircut of around 92% and settle for Rs 410 crore against their outstanding dues of Rs 5,370 crore after the Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday approved the resolution plan submitted by UK-based Liberty House. This is the third large company to be resolved under the Insolvency and Bankruptcy Code (IBC) after Bhushan Steel and Electrosteel Steels. In the case of Bhushan Steel, bankers were fortunate to get away with a haircut of only 37%; the haircut for Electrosteel Steels was a steep 60%. The bench of justice Jinan KR said on Tuesday, “…the revival plan of the company in accordance with the approved resolution plan shall come into force with immediate effect.”
LIC nominee not independent: TRP
The simmering battle at the country’s sixth largest mutual fund, UTI, has erupted into a full-scale war, and the mutual fund’s proposed initial public offering (IPO) could be the first casualty with its managing director Leo Puri’s tenure also coming to an end next month and no successor nominated. UTI’s only private sector investor, US firm T Rowe Price (TRP) has complained to the Securities and Exchange Board of India (Sebi) on what it termed the Life Insurance Corporation of India’s (LIC) false declarations on the independence of its nominee, former LIC chief DK Mehrotra, on the UTI asset management committee (AMC) board. In addition, TRP has cited instances of how all the PSU shareholders — LIC, State Bank of India, Punjab National Bank and Bank of Baroda — are interfering in the UTI AMC’s functioning. While TRP owns 26% of UTI AMC’s equity, the PSU institutions own 18.25% each.
Trai has the right approach to privacy laws
Given that the Justice BN Srikrishna panel on data privacy is supposed to be submitting its report any time now, after which a privacy law will be framed by the government, it is not quite clear why the telecom regulator, Trai, has come out with its recommendations on data privacy/security/ownership; all aspects of the subject, after all, will be covered by Srikrishna. Indeed, it is not clear how Trai expects the government to ‘notify the policy framework for regulation of devices, operating systems, browsers and applications’ since Srikrishna’s mandate is to come up with this very data protection framework. And, since a new law has to come in place anyway, it makes little sense to, in the interim, mandate that the privacy rules that apply to telcos ‘be made applicable to all the entities in the digital ecosystem’ as Trai suggests.
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