Bid eligibility challenge: NCLAT clears the deck for Tata Steel and Vedanta
The National Company Law Appellate Tribunal (NCLAT) on Friday dismissed the petitions of former promoter and managing director of Bhushan Steel Neeraj Singal, who had challenged the eligibility of Tata Steel to bid for his bankrupt company, as well as that of Renaissance Steel, which had challenged the eligibility of Anil Agarwal’s Vedanta to bid for Electrosteel Steels. Though the National Company Law Tribunals had cleared the bid of Tata Steel for Bhushan Steel on May 15 and Vedanta’s for Electrosteel on April 17, both were challenged in the NCLAT, which while not staying the awards had said that the final outcome will depend on its decision on the petitions.
Rajya Sabha clears insolvency Bill
The Rajya Sabha on Friday passed the Insolvency and Bankruptcy Code (second amendment) Bill to accord homebuyers the status of financial creditors. The Bill, meant to replace an ordinance promulgated in June, has already been approved by the Lok Sabha. It will be made into law soon once it gets the Presidential approval. The Bill allows promoters of micro, small and medium enterprises, who are not willful defaulters, to bid for their stressed companies and provides for withdrawal of a case after admission by the adjudicating authority if it is approved by 90% of creditors.
Daiichi case: Delhi HC grills Singh brothers, freezes their assets
Coming down heavily on former Ranbaxy promoters Malvinder and Shivinder Singh, who were personally present in the court on Friday, the Delhi High Court barred them from selling any of their assets without its approval and also asked them to furnish details of all their sold and gifted assets, including bank accounts, from April 2016. While freezing their bank accounts, Justice Rajiv Shakhder also barred Malvinder Singh from selling his property in Singapore, which is currently mortgaged with DBS Bank. Questioning the brothers in open court on bank accounts and properties in India and abroad, the bench asked them to reveal the assets sold since April 2016 before September 5, which is the next date of hearing.
Lok Sabha approves changes: GST cess surplus can now be shared
In a move that would partly address the goods and services tax (GST) revenue deficit for the Centre and come in aid of states worried over stagnant growth in their own tax (non-GST) revenue, the Lok Sabha on Thursday approved changes to the relevant law to allow both to dip into the surplus in the GST Compensation Fund at any time during a financial year. The law has hitherto allowed division of the surplus only after a five-year “transition period” (till June 2022), during which states are constitutionally guaranteed a GST revenue growth (over the base year, 2015-16) of 14% per year, meaning any shortfall from the threshold will be compensated from the fund.
Some companies under insolvency resolution face fraud check
About a dozen companies undergoing bankruptcy resolution are being reviewed by banks and investigating agencies for fraudulent activities including diversion of funds. A senior government official confirmed the development and said that some discrepancies have been pointed out in the case of a steel maker and a real estate firm among 10-12 companies. “There were some inputs and lenders have been asked to provide transaction details of last five years. If required, banks will also undertake forensic audit,” he said. On Thursday, the Serious Fraud Investigation Office (SFIO) arrested the former promoter of Bhushan Steel for the alleged diversion of Rs 2,000 crore raised through loans from state-owned banks.
Ministry of corporate affairs deregisters 50,000 shell companies in a week
The ministry of corporate affairs (MCA) has deregistered about 50,000 companies in the last week as part of its ongoing drive against shell companies. The Delhi Registrar of Companies (RoC) has stuck off the names of more than 30,000 companies over the last three days, while more than 11,000 companies have been deregistered by the Mumbai RoC. Other RoCs have also struck off companies. “These companies have been stuck off for not carrying any business or operations for the last two consecutive years. More such companies are likely to be stuck off in the next few days,” a senior government official said.
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