Two years of IBC: Resolution for just 34 defaulters out of 91 cases
Over 977 companies have been admitted under the Corporate Insolvency and Resolution Process (CIRP) since the implementation of the Insolvency and Bankruptcy Code (IBC) in 2016. During the April-June quarter 244 corporate defaulters were freshly admitted under the CIRP and around 716 corporate defaulters are still undergoing the process as of date. About 91 of the IBC cases filed against corporate debtors were closed upon ‘appeal and review’ and only 34 cases have seen successful resolutions as of the end of June under the CIRP, according to data from the Insolvency Bankruptcy Board of India (IBBI).
Govt must resolve conflict between two laws: Bankers
Bankers have asked the government to resolve the conflict between Sections 230-232 of the Companies Act that indirectly allow defaulting promoters to take over their assets after they have gone into liquidation and Section 29 (A) of the Insolvency and Bankruptcy Code, which bars such promoters from bidding for assets undergoing corporate insolvency resolution process (CIRP). Executives from two public sector banks (PSBs) told FE that while there has been no written communication sent to the government, lenders have suggested an amendment to the Companies Act to harmonies it with the IBC at various forums.
Apex court to settle law to minimize NCLT, NCLAT interference
The Supreme Court on Wednesday observed that it will settle the law so as to avoid any interference by the National Company Law Tribunal (NCLT) and its appellate body National Company Law Appellate Tribunal (NCLAT) at every stage of the resolution process of a bankrupt company. The apex court’s observation came during a hearing on the appeals of ArcelorMittal and Numetal which have challenged the eligibility of each other to bid for Essar Steel following an order of the NCLAT. A bench led by Justice RF Nariman said that any interference by the “NCLT should come only at the post-CoC (committee of creditors) stage. It has to be stopped.
SECI relaxes norms for 10 GW solar auctions linked to manufacturing
Following multiple postponements for the bid submission dates for the forthcoming 10,000 MW manufacturing-linked solar auctions, the Solar Energy Corporation of India (SECI) has eased a few norms for firms potentially participating in the bids. As per the new amendments, the amount of bank guarantee to be submitted by developers has been reduced by almost 25% to Rs 466 crore. The ceiling tariff for auctions has also been cut to Rs 2.75/unit, instead of the Rs 2.93/unit set earlier. To boost solar manufacturing, the government had introduced the manufacturing-linked solar scheme, where developers would be provided with assured power purchase agreements (PPA) against the capacity of solar module manufacturing plant they set up in the country.
BSE, NSE to foray into commodity derivatives from Oct 1, to start with gold
India’s two leading equity bourses, the National Stock Exchange (NSE) and BSE, on Wednesday said they will foray into the commodity derivatives space starting next month. Both these exchanges have received the approval from the Securities and Exchange Board of India (Sebi) to start commodity futures trading. They have also obtained regulatory approval for their respective clearing corporations. The entry of BSE and NSE into commodity derivatives trading is expected to give a fillip to the market as the broker and client base will expand. Brokers, however, say equity exchanges will have to innovate to make inroads into the commodity space.
RBI eases overseas borrowing limits, masala bond rules
The Reserve Bank on Wednesday eased norms for companies in the manufacturing sector in raising overseas funds and allowed Indian banks to market masala bonds in line with the government’s measures to prop up the rupee. Following a review of the economy by Prime Minister Narendra Modi last week, the government announced an array of measures to check the decline of the rupee and curb the widening current account deficit (CAD). Liberalization of the external commercial borrowing (ECB) norms was among other measures announced by the government.
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