India’s bankruptcy law faces a vital test as creditor banks vote on a winning bid for the first financial company to go through insolvency resolution, a process pitting US distressed-debt fund Oaktree Capital against India’s Piramal Group, the Financial Times reported. Real estate lender Dewan Housing Finance Corporation, known as DHFL, was the first financial group forced into insolvency in November 2019 after defaulting on about $12bn in debt. Authorities hope a successful resolution will create a new avenue to clean up India’s fragile financial system, where defaults and governance scandals have forced multiple central bank- and government-led bailouts. DHFL’s case is also being seen as a bellwether by foreign investors at a time when India is under pressure to welcome overseas capital, after lengthy tax disputes with Vodafone and Cairn Energy that have tarnished the country’s image. But bickering between rival bidders accusing each other of rule-bending and unfair practices has prolonged the process. DHFL’s creditors are due to vote on a winning bid on Thursday, but people close to the process say litigation may further delay resolution. Oaktree, which has $140bn in assets globally, has threatened litigation over what it calls discrimination by the creditors against foreign investors. The fund has alleged its superior bid was being overlooked in favour of Piramal’s because local banks preferred an Indian buyer. Read more.