IBC process: 137 firms set for liquidation, but buyer interest is muted
The majority of companies going for liquidation under the Insolvency and Bankruptcy Code (IBC) have been non-operational for almost over a decade. With assets depreciating over time, experts say, the demand from buyers will be “muted”, leading to large haircuts for lenders and creditors. “These companies have not been doing well for a considerably long period and efforts have been made in the past to revive them, but these failed,” said Anil Gupta, vice-president at ratings and research firm ICRA. In an email response, ICRA told Business Standard of the 87 firms identified in March this year for liquidation, 74 were under the purview of the Board for Industrial and Financial Reconstruction (BIFR) and are non-operational
Willful defaulters, economic offenders may not settle a case, suggests Sebi panel
Suggesting sweeping reforms, a high-level Sebi committee today recommended that willful defaulters and fugitive economic offenders cannot settle a case under settlement norms, as well as addition of a confidentiality clause in the process. Besides, it has recommended that proceedings relating to insider trading, front-running and misstatements in the IPO documents may be settled “depending on the facts and circumstances of each case”. It further suggested that Sebi may not settle a proceeding in case the alleged default has market wide impact, caused losses to a large number of investors, or affected the integrity of the market.
Since signing of ICA: PSBs put NPAs worth Rs 8,706 cr up for sale
Public-sector banks (PSBs) have put on sale non-performing assets (NPAs) worth Rs 8,706 crore since the signing of the inter-creditor agreement (ICA) on July 23, implying that they will continue to look for other ways to palm off exposures to bad loans unilaterally and make quick cash recoveries. All PSBs have signed the ICA. Indeed, if NPA sales by lenders who have not signed the ICA were taken into account, the cumulative out standings on sale would stand at Rs 20,810 crore. While IFCI has put loans worth Rs 11,042 crore on sale, Axis Bank has sought buyers for exposures worth Rs 1,062 crore.
Stressed power projects: RBI blames government for crisis
Even as a parliamentary panel, and to some extent, the finance ministry have pressured the Reserve Bank of India (RBI) to relax its February 12 circular mandating one-day default trigger for resolution of stressed assets exclusively for power projects, the central bank has shot back and virtually blamed the government for the current crisis in the sector. In a letter to the power ministry last week – the Allahabad High Court is scheduled to hear the matter on Tuesday – the RBI cited preferential treatment to state-owned power utilities like NTPC as one of the reasons behind the stress in the power sector.
E-commerce: DIPP unlikely to rush to allow FDI in inventory model
Even though a task force on e-commerce has suggested that up to 49% foreign direct investment (FDI) is allowed in e-tailers holding inventory of locally produced goods, the Department of Industrial Policy and Promotion (DIPP) is unlikely to rush into effecting such a change. Currently, up to 100% FDI is allowed in e-commerce marketplaces via the automatic route but no foreign investment is allowed in e-tailers holding inventory of goods, except in the retailing of domestically-produced food items. The DIPP — the nodal department to formulate FDI policies for the retail sector — has no plan to ease the existing policies for e-tailers as of now, a senior official told FE.
SEBI may soon set trading limits for retail investors
Markets regulator SEBI may soon set a trading limit for retail investors based on their income or net worth. Simply put, retail participants in the equity and commodity markets may have to submit a net worth certificate to their brokers. Their trading limits cannot exceed their income levels. This follows the proposal by the committee on fair market conduct, headed by TK Vishwanathan, a former secretary-general of the Lok Sabha and an ex-Law Secretary that SEBI limit the trading activity of retail participants, mainly in the equity market, based on their net worth.
Bombay HC directs CBDT to reply on STT on physically-settled derivatives
The Bombay High Court ordered the Central Board of Direct Taxes (CBDT) to provide clarity on the issue of securities transaction tax (STT) levy on physically-settled derivatives. The court on Monday heard an appeal filed by brokers’ lobby Association of National Exchanges Members of India (Anmi) against the National Stock Exchange (NSE) after the bourse decided to levy the STT at 0.1 per cent on derivative contracts of stocks that are physically settled. This is 10 times higher than the 0.01 per cent STT levied on stocks that are cash-settled. The next hearing in the matter will take place on Thursday.
CCI approves acquisition of debt-ridden Ruchi Soya by Adani Wilmar
Fair trade regulator Competition Commission has approved the acquisition of Ruchi Soya by Adani Wilmar. Adani Wilmar had emerged as the highest bidder (H1) with an offer of about Rs 60 billion for Ruchi Soya, which is facing insolvency proceedings. “CCI India finds no Appreciable Adverse Effect on Competition in the proposed acquisition of Ruchi Soya by Adani Wilmar Limited,” the regulator said in a tweet. Mergers and acquisitions beyond a certain threshold require the approval of the Competition Commission of India (CCI).
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