6 more state-run banks may come under PCA
Six more state-run banks are at risk of entering the Reserve Bank of India’s prompt corrective action (PCA) framework, officials said. These include Punjab National Bank, Union Bank of India and Syndicate Bank, they said, adding that this may reduce the chances of the finance ministry’s plans to sell the good loans of weak banks to stronger lenders coming to fruition. If the Reserve Bank of India imposes restrictions on these lenders in the next one month, it will bring the number of state-run banks under the PCA framework to 17.
Amendment to IBC will help small stakeholders but delay resolution
The recent amendment to the bankruptcy law — that requires shareholder approval before a company files for insolvency and also mandates that the administrator convince the tribunal that the resolution plan is effectively implementable — will benefit small stakeholders but delay resolution. Last week, the Indian president approved to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, which was cheered for bringing home loan buyers at par with financial creditors besides other changes.
Insolvency: Miglani family in talks with foreign investors to settle dues
A buoyant steel market has prompted the Miglani family to open a dialogue with foreign investors for settling the dues of group companies facing insolvency proceedings, other than flagship entity Uttam Galva Steels. Sources disclosed talks were on with foreign investors for Uttam Value Steels and Uttam Galva Metallics. These two companies had been referred like Uttam Galva Steels to the National Company Law Tribunal (NCLT); however, a decision on admission for insolvency proceedings has yet to be given.
CCI may suggest changes to Walmart-Flipkart deal
The Competition Commission of India (CCI) might recommend structural changes to the proposed $16-billion Walmart-Flipkart deal to address possible competition concerns, according to officials. It might also take cues from a ruling in South Africa with respect to the Walmart-Massmart deal, which was announced in 2010. Last month, Walmart Inc announced the acquisition of a 77 per cent stake in Flipkart for about $16 billion (₹1.05 lakh crore) in the largest-ever e-commerce deal. The retail giant has approached the CCI for approval, saying the deal does not raise any competition concerns.
Comprehensive contracts for CEOs become the new norm
CEO contracts are becoming more complex with an increasing number of clauses as the stakes get higher for occupants of the corner office. Shareholders and private equity investors want to get maximum value from CEOs, making contracts more sophisticated and comprehensive than they used to be, said lawyers, executive search experts and human resource heads. What used to be a two-to-three-page document runs into 20 pages or more, covering the actual employment contract, compensation, stock options and code of conduct. Those may be followed by clauses on information security and intellectual property rights.
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