KYC non-compliance: Govt deactivates ID numbers of 2.1 million directors
The government has started the process of de-activating the identification numbers of nearly 2.1 million directors of companies as they failed to comply with KYC norms, according to a senior official. The Director Identification Numbers (DINs) — a unique number allotted to individuals who are eligible to have directorship on the boards of registered companies — are being de-activated. They will be re-activated after a fee payment of Rs 5,000 along with the requisite form and the individuals concerned might also face action. The latest move by the Corporate Affairs Ministry also comes at a time when the government has intensified the crack down on shell companies, which are suspected to be conduits for illicit fund flows.
Liquidation of stressed firms: Creditors staring at 92% haircut
Creditors, mainly banks, are staring at the prospect of an average haircut of 92% in 124 of the 136 stressed firms that were facing liquidation under the Insolvency and Bankruptcy Code (IBC) at the end of the June quarter due to the absence of resolution plans to turn them around, according to the data compiled by the Insolvency and Bankruptcy Board of India (IBBI). The liquidation value of the 124 companies has been pegged at just Rs 4,817 crore, while the total admitted claims of creditors (both financial and operational) stand at Rs 57,121 crore. The liquidation values of a dozen others were yet to be determined, although the total admitted debt involving all the 136 stressed firms stood at Rs 57,378 crore, showed the IBBI data, based on inputs from resolution professionals.
RBI not on high-level panel to resolve stress in power sector
The Reserve Bank has refused to be part of a high-level committee headed by the Cabinet Secretary which was constituted to resolve stress in the power sector as it is not willing to relax norms to deal with bad loans, according to a source. “The RBI has shown its unwillingness to attend the meeting of the empowered committee to resolve stress in power sector. Their representatives did not attended first and second meeting of the panel held on August 31 and September 14,” the source said. “The central bank has given its own reasons for its refusal to attend meetings of the committee. RBI has made its stand clear in courts that they would not relax the new framework to resolve bad loans. Moreover, RBI is not ready to relax norms for setting up an asset reconstruction company for warehousing stressed projects to prevent distress sale,” the source added.
Banks to go ahead with power units’ resolution plans
Banks have decided to continue with their resolution plans for power plants without seeking any advice from the Reserve Bank of India. The decision follows a favourable legal advice in the interpretation of the Supreme Court’s September 11 interim order that directed status-quo on the matter. The banking regulator is also unlikely to come out with any clarification following the Supreme Court order, sources said. Banks sought legal advice on whether the Supreme Court order stalls the ongoing resolution process by the lenders. The order briefly said: “Status quo, as of today, shall be maintained in the meantime.”
IFCI expects resolution of NPA cases worth Rs 8,000 cr during this fiscal
State-owned IFCI has intensified its recovery process and expects resolution of several NPA cases worth Rs 8,000 crore during the course of the year, a top company official said. Earlier this year, IFCI saw recovery from resolution of various loan default cases, including Bhushan Steel, Monnet Ispat, Oswal Foods, Blue Coast Hotels and Rama Industries. Besides, other NPA cases with exposure of Rs 4,200 crore are at various stages of resolution through the NCLT under the Insolvency and Bankruptcy Code and Debt Recovery Tribunal. Besides, other NPA cases with exposure of Rs 4,200 crore are at various stages of resolution through the NCLT under the Insolvency and Bankruptcy Code and Debt Recovery Tribunal.
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