Videocon loan case: Income tax department issues notice to Deepak Kochhar
The income tax (I-T) department on Tuesday issued a notice to Deepak Kochhar’s troubled firm NuPower Renewables over alleged tax evasion in connection with the Videocon loan case. The notice was issued under Section 131 of the Income Tax Act, which allows authorities to conduct inquiries and summon assesses. “The department has issued a notice to NuPower Renewables, controlled by ICICI MD and CEO Chanda Kochhar’s husband,” said an official. Deepak Kochhar, founder & CEO of NuPower Renewables, has been asked to furnish details of I-T returns and his personal finances over the last few years.
IBC committee wants wider pool of bidders for insolvent companies
A high-level panel on reviewing the Insolvency and Bankruptcy Code (IBC) has suggested widening the pool of those who can bid for insolvent companies. Earlier, the government had inserted Section 29 (A) to the Code, debarring related parties and connected persons of defaulting entities from bidding for a company. In a report, submitted to the government last week but put in the public domain on Tuesday, the committee recommended narrowing down the list of debarred entities to only those closely related to defaulting promoters. The committee said debarring those remotely related to defaulting promoters might shrink the pool of resolution applicants.
Insolvency rule change on valuers leads to lack of clarity on valuation gap
A recent notification asking the resolution professionals (RPs) of insolvent companies to engage two registered valuers is working as a double-edged sword. While the move helps in a better valuation, there is no clarity on how to decide between differing ones. While some are already conducting valuations by two valuers, all others need to start this process from April 1. Those already conducting two valuations for a company state both are often starkly different. RPs say they are going by the average of both values in such cases, as no mechanism is mentioned in the insolvency code. Sources say this is being remedied; new norms will state under what heads the RPs should ask the valuers to work, so that there is no anomaly.
Sebi releases exhaustive list of over 2,000 defaulters’ names
The Securities and Exchange Board of India (Sebi) on Tuesday released an exhaustive list of entities that have defaulted on payment of penalties imposed by the market regulator for violation of various securities norms. SBI Capital, Axis Capital, GMR Holdings, United Breweries, Alpic Finance (a Cipla group unit), Saradha Realty, United Bank of India and Trident India are among the prominent entities named in the list. According to the Sebi data, as on February 7, total number of defaulters was 2,183, including both individuals and companies against whom the watchdog has passed adjudication orders.
Insolvency may suspend many rights but not the minority’s right to disclosures
The lot of minority shareholders of companies undergoing insolvency proceedings is a sorry one. The popular narrative might be one where the promoters (who are also the management) have mismanaged affairs or worse. In reality, since the company has defaulted on its loan and not the promoters, all shareholders, being owners, take responsibility. That’s why their board is suspended, and a resolution professional is in charge, acting on behalf of the committee of creditors (CoC). Still, minority shareholders of listed companies deserve better, at least in terms of transparency. A certain restoration of rights is in order.
Securities scanner: CAs, valuers and CSs could come under Sebi ambit
Chartered accountants and company secretaries may soon come under the ambit of the capital markets regulator. The Securities and Exchange Board of India will issue rules that will put the onus on chartered accountants, company secretaries, cost accountants, valuers and monitoring agencies to get companies to comply with securities regulations and act in the interests of public shareholders. Currently, most of them are not regulated by Sebi. The proposal was taken to the regulator’s board on March 28 and a discussion paper will be issued soon, said a Sebi board member.
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