Insolvency law: IBBI chief puts India Inc’s directors on notice
Directors of companies facing the insolvency process cannot go unscathed while the companies they ran are hauled over the coals. For the first time ever, insolvency regulator IBBI has warned of action under the Insolvency and Bankruptcy Code (IBC) against those directors who failed to discharge their duties in the interest of the creditors during the ‘twilight zone’ period. The ‘twilight zone’ refers to a ‘look-back period’: it can be a few months to a few years before commencement of the insolvency process. The twilight period is not defined in the IBC.
RBI cuts provisioning norm for advances to large accounts now before NCLT
Throwing another lifeline to banks, the Reserve Bank of India has reduced the provisioning requirement for large accounts referred to the National Company Law Tribunal (NCLT) up to March 31, 2018. This comes on fears that banks may be worse off due to bad loans provisioning when they declare their financial results for FY2018, Provisioning for the secured portion of the large accounts (from the RBI’s first and second list), which are currently undergoing corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC) has been brought down from 50 per cent to 40 per cent.
Bankruptcy: RBI gives provisioning relief to stressed banks
The Reserve Bank of India has temporarily relaxed provisioning norms for lenders to defaulters undergoing bankruptcy resolution in a move that could help banks bolster their financial results for the year and quarter ended March. Provisions for accounts referred to the National Company Law Tribunal (NCLT) have been reduced to 40% of dues at the end of March for secured loans, down from 50% earlier, RBI told banks in a circular issued to them on Wednesday.
Supreme Energy’s stake in NuPower sold at market rate: Deepak Kochhar
When Deepak Kochhar’s Pinnacle Trust bought the stake held by Venugopal Dhoot’s Supreme Energy in NuPower in 2010, the deal came with a liability of a Rs 640 million loan. Kochhar, currently managing director (MD) of NuPower Renewable, is in the middle of a controversy involving his wife and ICICI Bank MD and CEO Chanda Kochhar’s alleged conflict of interest in being part of a committee that approved the loan to Dhoot’s Videocon group. “When Pinnacle Trust bought the stake of Supreme Energy, it included a liability of Rs 640 million. The purchase was at a fair market value (prevailing price) of Rs 8.80 per share,” Deepak Kochhar said in a telephonic conversation with Business Standard.
Cabinet approves reducing the strength of CCI members to 3 for speedy approvals
The Cabinet on Wednesday approved reducing the size of the Competition Commission of India (CCI) in line with the government’s policy of “minimum government and maximum governance” as well as global standards. It attributed the move to its earlier decision of not having additional benches. At present, the CCI can have six members and one chairperson. This will now be reduced to three members and one chairperson. The commission currently has four members. Two existing vacancies will not be filled, while none will be appointed in place of the one member, who is due to retire in September.
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