Stressed power assets: REC asked to remodel Pariwartan ARC
With the Reserve Bank of India refusing to the relax its norms for asset reconstruction companies (ARCs) exclusively for the one planned for the power sector, the government has asked the Rural Electrification Corporation (REC) to tweak the structure of the proposed ARC under the so-called Pariwartan scheme. This would mean that the ARC would have to make upfront payment of 15% of the value of the assets it assumes to the banks concerned and also maintain a 15% capital adequacy. Also, lenders will have to continue making provisions as per the stressed projects’ net asset value.
KYC for FPIs: SEBI to review April circular
Amid apprehensions that its April 10 circular on beneficial ownership of offshore funds could cause potential capital outflows of $75 billion, the Securities and Exchange Board of India (Sebi) said on Wednesday it would review the matter and take a “holistic view”, seeking to assuage panic among investors. The markets regulator said a working group, set up under former Reserve Bank of India deputy governor HR Khan to address various issues relating to the circular, has already heard various stakeholders and is in the process of giving its recommendations.
Delhi HC asks ex-Ranbaxy promoter Malvinder Singh to deposit 3.5 million Singapore dollars
Cracking the whip for disobeying its order passed in February, the Delhi High Court on Wednesday asked former Ranbaxy promoter Malvinder Singh to deposit the sale proceeds of around S$3.5 million of his shareholding in Singapore-listed Religare Health Trust within four weeks. Justice Rajiv Shakdher also barred Malvinder and his brother Shivinder Singh from moving any assets abroad and also directed freezing of their shares in Best Healthcare, which owns the Fortis trademark. It also directed the release of Rs 9.38 crore received by them from the sale of their shares in listed companies towards part payment of Japanese pharma major Daiichi Sankyo’s 3,500-crore arbitral award against the brothers.
Assurance on solid-waste handling: SC lifts ban on construction in Maharashtra, Uttarakhand
In a major relief to the real estate sector, the Supreme Court on Wednesday lifted a ban on construction activities in Maharashtra and Uttarakhand. The top court had on Friday imposed a ban on construction activities in three states — Maharashtra, Uttarakhand and Madhya Pradesh — citing their failure to frame a policy on solid waste management. A bench led by Justice MB Lokur lifted the ban on the two states after the state governments informed it that they have framed a policy on solid waste management. The Maharashtra government said that its revised policy on solid waste management will be soon placed before the Cabinet for approval.
Coca-Cola, Zydus Cadila battle for Kraft Heinz India brands
The Coca-Cola Co., the world’s largest beverage company, and the Zydus Cadila Group have emerged as the two strongest contenders for the consumer portfolio of Kraft Heinz in India, which includes the children’s milk drink Complan, people with knowledge of the matter said. The two are expected to submit binding bids in the coming days amid final negotiations. In August, Kraft Heinz had narrowed the list of bidders for a second round of talks and shortlisted some of the biggest food and consumer companies including Tata Group, Wipro Consumer, Dabur India and Danone along with Coca-Cola and Zydus Cadila.
L&T shareholder moves NCLT, alleging fraud in employee fund
Uday Dixit, a shareholder and former employee of L&T whom the company’s top boss AM Naik had ordered to be removed from the company’s annual general meeting (AGM) last month, has approached the National Company Law Tribunal (NCLT) alleging fraud and mismanagement of employee welfare fund and assets of the company. Dixit has claimed in his petition that the top management of L&T, including Naik, are guilty of fraud on shareholders and employees of L&T. The petition before the NCLT claims that L&T had deducted a sum from the salaries of its employees, including his, between 2003 and 2008, including his, without taking due consent.
SC relief for Nirav Modi firm’s former directors
Three former independent directors of one of fugitive jeweller Nirav Modi’s firms won a temporary reprieve from the Supreme Court, after battling government agencies in courts over access to their bank accounts since India’s biggest bank fraud, involving Modi, unraveled in February. The three—Sanjay Rishi, president of American Express for South Asia; Gautham Mukkavilli, a former PepsiCo India president; and Suresh Senapaty, a former chief financial officer of Wipro—were restrained from freely accessing their bank accounts as part of an ongoing investigation by the ministry of corporate affairs.
Mountain of false claims tests bankruptcy process
Finding a buyer for indebted companies is tough, but going by the experience of bankruptcy resolution professionals, the tedious task of verifying thousands of claims—many fictitious—made by operational creditors is even more arduous. In the case of ABG Shipyard, one of the companies referred to bankruptcy courts, the percentage of claims made by operational creditors that were rejected stood at a staggering 90% of the total claims. Sutanu Sinha, the resolution professional for debt-laden IVRCL Ltd, had to reject many claims filed by operational creditors as records of those could not be found on the company’s books.
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