RBI gives in-principle nod to LIC for acquiring majority stake in IDBI Bank
The Reserve Bank of India (RBI) has given an in-principle nod to Life Insurance Corporation (LIC) for acquiring a majority stake in IDBI Bank, sources said. The government-owned insurance behemoth had sought the banking regulator’s nod before it had approached the Insurance Regulatory and Development Authority (IRDAI) for seeking regulatory approvals, a senior government official said. After the Union Cabinet approves the proposal, the RBI will examine if LIC meets the “fit and proper criteria” for being a promoter with a controlling stake in IDBI Bank. The Cabinet nod is required because the government’s stake will be diluted below 51 per cent in IDBI Bank. The government owned 85.96 per cent and LIC 7.98 per cent in IDBI Bank at the end of June.
Philips wins patent battle in Delhi HC
Dutch electronic major Philips has won a major legal battle here with the Delhi High Court ruling that it has a patent right over a channel decoding technology used for DVD video playback function in a DVD player which was infringed upon by two domestic manufacturers. The high court decreed the two lawsuits filed by Koninklijke Philips Electronics NV against the Delhi-based firms which claimed that they were engaged in manufacture, assembly and sale of DVD video players under various brands. Philips, which was represented by advocate Pravin Anand, claimed that it was the registered proprietor of IN-184753 which concerns channel modulation’ which involves a coding step that is performed directly before the storage of the data.
NCLT decision: Monnet Ispat goes to JSW Steel-Aion
The sole resolution plan for the bankrupt Monnet Ispat and Energy from the JSW Steel-Aion Investments combine was finally accepted by the Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday with certain modifications, exactly a year after the steelmaker was admitted for insolvency proceedings. The financial creditors of Monnet Ispat have claimed dues of Rs 11,573 crore as on April 7, 2018, while the NCLT has admitted claims of around Rs 11,014 crore. As per the resolution plan, the lenders are likely to receive Rs 2,457 crore, which translates into a haircut of about 77.69% for the lenders. Apart from State Bank of India, which is the lead bank, some of the other lenders to the company include Bank of Baroda, Bank of India, IDBI Bank, ICICI Bank and Axis Bank.
NCLT clears JK Paper’s resolution plan to revive Sirpur Paper Mills
The Hyderabad bench of National Company Law Tribunal (NCLT) has approved the resolution plan submitted by JK Paper for reviving Sirpur Paper Mills. Following the order, the company is hopeful of reopening in a week’s time. As per the resolution plan, the revival covers a total outlay of Rs 782 crore, including settlement of dues of about Rs 371 crore against a claim of Rs 673 crore, and investment of about Rs 400 crore towards revival and capacity augmentation. The five-member committee of creditors (CoC) led by IDBI Bank having Rs 533.38 crore of outstanding dues had approved the resolution plan submitted by JK Paper. The other lenders in the committee include State Bank of India, Central Bank of India, Andhra Bank and Syndicate Bank.
Tougher law on anvil: Bill to attach assets of fugitive offenders gets Lok Sabha approval
The Lok Sabha on Thursday approved a Bill to attach assets of fugitive economic offenders and replace an ordinance promulgated in April. The Fugitive Economic Offenders Bill (FEOB) will make it easier to attach all the assets of economic offenders fleeing India to escape the reach of law – including Nirav Modi, Mehul Choksi and Vijay Mallya – even without conviction. It will cover all economic offences of Rs 100 crore or more. While the existing Prevention of Money Laundering Act (PMLA) has provisions for confiscation of an offender’s assets, it’s only after his conviction, and the attachment is also limited to the proceeds of crime. However, the ordinance provides for attachment of all the assets of offenders, irrespective of the proceeds of the crime.
Sebi to soon frame guidelines to allow MFs in commodity derivatives
To increase the institutional participation in the commodity segment, Sebi today said it will soon finalize the guidelines to allow mutual funds (MFs) to invest in commodity derivatives segment. The markets regulator said it will also frame warehousing norms for non-agriculture commodities and will consider allowing ‘indices’ once its robustness is established by the bourses. Addressing an Assocham event here, head of Commodity Derivatives Market Regulation Department (CDMRD) in SEBI, P K Bindlish said the commodity derivatives market is still faced with challenges even though the trading volumes have risen up to Rs 100 lakh crore. To increase participation, SEBI is now moving towards allowing mutual funds. “We are working on finalizing the guidelines at the earliest,” he said.
Reserve Bank to hold joint audit of credit rating agencies with Sebi
Credit rating agencies will come under closer regulatory watch amid corporates battling bankruptcies, lenders taking hefty haircuts, and banks trying to prune sticky loans. The Reserve Bank of India (RBI) will conduct regular audit and inspection of rating agencies whose actions can significantly influence the borrowing price of all companies — including insolvent businesses looking for a second life. Till now, such audits were only carried out by the Securities and Exchange Board of India (Sebi), which has been monitoring rating agencies since 1999. Recently, communicating its decision to hold joint audit/inspection with Sebi, the central bank has asked agencies to avoid sharp downgrades that rattle investors, and exercise caution when corporate fish around to shop for a better rating, person aware of the development told ET.
CCI nod must before lenders finalize resolution plan
Lenders will need to seek prior approval of the competition regulator before finalizing resolution plans, according to amendments to the Insolvency and Bankruptcy Code (IBC) that were approved by the cabinet on Wednesday. The measure seeks to prevent litigation that can derail the resolution process at a later stage, said a top government official and two bank executives. The official said Competition Commission of India (CCI) assent will be needed before the committee of creditors (COC) finalizes a resolution plan. Currently, the winning bidder approaches CCINSE 0.00 % for clearance before formally taking over the asset. The cabinet approved the IBC Amendment Bill 2018 that will replace the ordinance the government had promulgated earlier.
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