IBC amendment cleared: Home buyers now at par with creditors
The Lok Sabha on Tuesday cleared amendments to the Insolvency and Bankruptcy Code (IBC) that provide relief to home buyers who, as financial creditors, will be able to decide the future of defaulting builders alongside their lenders. The IBC amendment also makes it easier for banks to agree on salvaging a failed firm from being wound up by lowering the votes needed for taking critical decisions to 66% from 75%. The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018, seeks to replace the 6 June ordinance that sought to put these provisions into force to aid quick resolution of several bankrupt firms. The demand from the main opposition party, the Congress, to refer the proposed amendments to a parliamentary panel was not accepted.
IBC ordinance not aimed at favoring any corporate house: Piyush Goyal
Amid charges flying thick and fast over the government’s proximity with India Inc, Corporate Affairs Minister Piyush Goyal on Tuesday rejected the Opposition’s allegation that it has come out with an ordinance to amend the Insolvency and Bankruptcy Code (IBC) to favour a big corporate house. Replying to a debate on the Insolvency and Bankruptcy Code (Second Amendment) Bill 2018 in the Lok Sabha, Goyal said the government brought the ordinance to ensure speedy resolution of stressed assets and for the benefit of homebuyers and the MSME sector. The Bill to replace the ordinance was approved by the Lower House by a voice vote after the Opposition walked out in protest alleging that the minister had not given a proper reply to the issues raised by them.
I-T dept can’t attach property being liquidated under IBC
Government agencies don’t have rights on the encumbered property of a company facing liquidation under the Insolvency and Bankruptcy Code, the Hyderabad High Court has ruled. A Bench of Justices Sanjay Kumar and Amarnath Goud was hearing a case filed by Leo Edibles and Fats against a decision of the Sub-Registrar of Erragadda, Hyderabad. The government official had refused to register immovable property that Leo acquired from VNR Infra under the liquidation process overseen by the National Company Law Tribunal (NCLT). The Sub-Registrar had claimed that the Income-Tax Department had issued attachment orders on the property before the IBC process took shape.
Speeding up the process: NCLT may move cases to other benches
The Insolvency and Bankruptcy Board of India (IBBI) is considering allowing cases admitted by the National Company Law Tribunal (NCLT) for insolvency proceedings to be shifted from one bench to another to speed up the resolution process, sources close to the development said. In order to avoid piling up of cases at NCLT benches, the IBBI is likely to allow cases to be moved to less busy benches from benches where the number of cases is higher, the sources quoted above said. Typically, the NCLT benches at New Delhi and Mumbai receive far more number of cases compared with other benches such Jaipur or Chennai. “This move will help in faster resolution through more efficient utilization of the resources that are currently available,” a senior banker with a large public sector bank said on condition of anonymity.
SEBI pins co-location scam on Delhi brokerage
Markets regulator SEBI has nailed Delhi-based broker OPG Securities for securing unfair access to the National Stock Exchange’s co-location facility. SEBI said the preferential treatment resulting in OPG’s unfair access could not have been possible without the active connivance of staff at the bourse. In show-cause notices issued to brokers, and the NSE’s current and former employees, on July 3, the markets regulator gave details of how OPG got preferential access to trading systems, and managed to dictate terms at the exchange under former bosses Ravi Narain and Chitra Ramakrishna.
Sebi to empanel auditors to conduct forensic audits of listed firms
Markets regulator Sebi has decided to appoint auditors for conducting forensic audits of financial statements of listed companies to check frauds. The move comes amid Sebi ordering forensic audit of a slew of companies including Fortis Healthcare. Of late, there have been concerns voiced over certain auditors for being negligent while examining books of listed firms with various inconsistencies in financial statements being ignored. Sebi has now invited applications from eligible CA firms “for empanelment to take up assignments relating to forensic audit of financial statements of listed companies”. Spelling out the eligibility criteria, Sebi said that the applicant should have minimum 10 years of experience in the field of audit or forensic audit; should have at least 5 partners or directors involved in forensic audit related work, the regulator said in a public notice.
RIL wins arbitration case against govt’s claim of illegal gas production
In a major blow to the government in the gas migration dispute between Reliance Industries (RIL) and state-owned ONGC, an international arbitration tribunal on Tuesday ruled in favour of a consortium led by the Mukesh Ambani-led conglomerate. The tribunal rejected the government’s claim of illegal gas production by the consortium from the neighboring block of ONGC in the Krishna-Godavari (KG) basin. In addition, it awarded costs of $8.3 million (Rs 564.40 million), to be paid by the government to the consortium. The arbitration was over a dispute regarding a penalty of $1.55 billion slapped by the government on RIL and its partners, BP Plc and Niko Resources, for allegedly drawing gas from ONGC’s block.
Going private! Agarwal bids $1bn for rest of Vedanta
Vedanta Resources on Tuesday made a $1-billion offer to buy 33.47% non-promoter shares which values the company at $3.07 billion. “Under the terms of the offer, Vedanta shareholders will receive $10.89 per share in cash for each Vedanta share,” the company said in a filing to the London Stock Exchange which details its offer first announced on July 2. In addition, the shareholders will be entitled to receive a dividend of $0.41 per share in respect of the 12 months ended March 31, 2018. “Taken together, the offer price and the FY2018 dividend in aggregate represent a total value of $11.30 per share, which on the basis of the announcement exchange rate represents an illustrative premium of approximately 32.4% to the closing price of 647 pence per Vedanta share on June 29, 2018,” the company said.
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