A panel may favour giving NCLT power to halt resolution
The panel reviewing the Insolvency and Bankruptcy Code (IBC) may suggest that the National Company Law Tribunal (NCLT) should be empowered to halt resolution proceedings if lenders agree, something that only the Supreme Court can do now, said two senior officials with knowledge of the matter. The suggestion is that such a move should also have 90% supports from lenders, they said. This could help avoid complications like the one that has arisen in the Binani Cement resolution in which the defaulting promoters and UltraTech, which came in behind winning bidder Dalmia Bharat, have struck a deal to take over the promoters’ stake. Currently, only the Supreme Court can exercise powers under Article 142 of the constitution in cases that are pending in the NCLT.
PNB fraud: Bank likely to slap a civil case on staff linked to Nirav Modi
Investigations into the Punjab National bank fraud have found that some employees had created assets and maintained bank accounts abroad which the management and investigators suspect could be related to the Nirav Modi scam at the state-run lender, four people close to the development told ET. PNBBSE 2.07 % is considering initiating legal proceedings against errant employees to recover any money that they would have made illegally and parked abroad, they said. “While only a few employees have been named till now, more employees could be involved in the fraud. The bank has been intimated about the development,” one of the people said.
Vulture funds staying away from bidding for distressed companies
Vulture funds and some strategic buyers are staying away from bidding for distressed firms in the insolvency resolution process, waiting to snap them up at cheaper prices when they go into liquidation, according to details emerging from recent bankruptcy cases. So far, firms undergoing insolvency have seen limited interest from buyers, and could well see more takers as individual assets are liquidated at the end of the process. Although the law does not bar creditors from selling specific assets of a bankrupt firm before liquidation, they have been averse to the idea so far, preferring a single buyer for the entire company.
Resolution professional alleges fraud by Binani Cement promoters
The resolution professional for Binani Cement has filed an application in the National Company Law Tribunal (NCLT), alleging fraudulent transactions involving the promoters of the company. According to the application filed by resolution professional Vijaykumar Iyer, external forensic consultant Haribhakti & Co was appointed in November for reviewing some transactions by Binani Cement. Iyer has alleged that the promoters of Binani Cement diverted funds through capital advances, inter-corporate deposits, loans and other means to related parties at preferential prices, which, in turn, affected the company’s working capital position.
Supreme Court issues directives to safeguard govt officials under SC/ST Act
With a view to preventing the misuse of provisions of Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act 1989 (SC/ST Act), the Supreme Court on Tuesday held that there is no absolute bar for granting anticipatory bail in a matter under the Act. The Apex Court also added that a public servant can be arrested after granting of approval by some senior officer. The bench comprising of Justices Adarsh Kumar Goel and Uday Umesh Lalit further noted that to avoid the false implication of an innocent, preliminary enquiry will be done by the DSP to find out whether the allegations make out a case under the Atrocities Act and that the allegations are not frivolous.
India set to pitch for a global framework to tax digital companies
After global recognition to its equalisation levy on online advertisements from Facebook, Google or Netflix imposed two years ago, India is set to pitch for an international tax measure to tax these companies that earn revenues from a large user base in the country. The framework, technically called the multilateral instrument to implement tax-related measures (MLI) to prevent base erosion and profit shifting (BEPS), will avoid the need to amend individual bilateral treaties. In an interim report – Tax challenges Arising from Digitalization – released last week, the Organisation for Economic Co-operation and Development (OECD) suggested the use of interim measures like equalisation levy by countries to tax these companies till a long-term multilateral solution is reached.
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