IBBI penalises five debt resolution professionals
The Insolvency and Bankruptcy Board of India (IBBI) has for the first time penalized at least five resolution professionals, seeking to strengthen the dedicated loan-recovery mechanism that aims to extricate about $160 billion of lenders’ money stuck in bad assets. The penalties came for various reasons, including dubious conduct. Others were pulled up for not following the procedures that give the level-playing field to all creditors and bidders. IBBI data compiled by K V Sivaraman, an insolvency expert associated with Delhi-based AAA Insolvency Professionals; show that penalties were imposed on five occasions between April and now.
Panel pitches for restructuring offences under company’s law
A government-appointed panel to review the penal provisions under the Companies Act and examine de-criminalization of certain offences has suggested restructuring of corporate offences and an in-house adjudication mechanism so that courts get more time to deal with serious violations. The 10-member committee, headed by the secretary at the Ministry of Corporate Affairs, Injeti Srinivas, submitted the report to finance and corporate affairs minister Arun Jaitley on Monday. The panel also suggested disqualification of directors in case they have directorships beyond permissible limits and a cap on the remuneration of independent directors “in terms of percentage of income” in order to prevent any material pecuniary relationship.
Panel for internal e-adjudication system to take load Off NCLTs
The expert committee set up by the government to review penal provisions of the Companies Act, 2013, has favored decentralization of power to regional directors and setting up of an in-house e-adjudication mechanism to free up the overburdened National Company Law Tribunals (NCLTs) and Special Courts. The panel suggested that 16 out of the 81 compoundable offences should be dealt through the in-house e-adjudication mechanism, instead of going to special courts. Corporate affairs secretary Injeti Srinivas, who also chaired the committee, submitted the report on Monday to finance and corporate affairs minister Arun Jaitley.
Adani Power is said to near acquisition of GMR power plant
Indian billionaire Gautam Adani’s energy unit is nearing a deal to acquire a 1,370-megawatt thermal power plant backed by GMR Infrastructure Ltd., according to people with knowledge of the matter. Adani Power Ltd. will take over about 3,800 crore ($543 million) of loans out of a total of 5,800 crore that GMR Chhattisgarh Energy Ltd. owes, said the people, who asked not to be identified because the information is private. Adani Power will also assume non-funded liabilities of about 1,400 crore, the people said. India’s central bank has been looking to restructure stressed loans that have already pushed dozens of companies into bankruptcy.
Allahabad HC refuses interim relief to power firms from RBI directions
The Allahabad High Court (HC) refused on Monday to provide relief for privately-owned stressed power projects from the Reserve Bank of India’s (RBI’s) February 12 order. The RBI circular directed lenders to undertake insolvency resolution of defaulting companies within a strict timeline. The central bank had ordered banks to identify stress even when repayments were overdue by only a day. Resolution proceedings must be completed in 180 days, a deadline that ended on Monday. The court has, however, allowed the affected companies to try the legal route for individual grievances.
NCLT orders liquidation of Lanco Infratech, appoints Savan Godiawala as RP
The Hyderabad Bench of the National Company Law Tribunal (NCLT) on Monday ordered the liquidation of Lanco Infratech Limited (LITL), the holding company of the Lanco group, having a consolidated debt of Rs 500 billion. The Bench has appointed resolution professional (RP) Savan Godiawala as the liquidator and directed him to initiate the liquidation process as prescribed under Chapter-3 of the Insolvency and Bankruptcy Code (IBC), 2016, by following the liquidation process stated in IBBI (liquidation process) Regulation, 2013.
Govt panel recommends cap on remuneration of independent directors
A panel has recommended capping the remuneration of an independent director from a company to one-fifth of his gross annual income to ensure his independence. The committee, headed by Corporate Affairs Secretary Injeti Srinivas, suggested a ceiling on independent director’s remuneration in terms of percentage of income in order to prevent any material pecuniary relationship, which could impair his independence on the board of the company. The committee submitted its report to Finance Minister Arun Jaitley on Monday.
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