Headlines

The former head of China's securities regulator has raised concern about banks addressing funding shortages by ramping up issues of short-term interbank debt instruments that have in the past attracted regulatory scrutiny, the International New York Times reported on a Reuters story. Xiao Gang, former chairman of the China Securities Regulatory Commission, said that against the background of a large increase in bank credit, banks faced an "arduous task" of making up for cash shortfalls for maturing old products.

Pre-dominance of cash transactions, independence of directors and frequent changes of auditors are among the potential red flags for insolvency professionals in detecting avoidance transactions during insolvency proceedings, according to an IBBI document, ETRealty reported. Under the Insolvency and Bankruptcy Code, resolution professionals and liquidators are required to determine whether corporate debtors concerned were subject to avoidance transactions. The Code provides for a time-bound and market-linked resolution of stressed assets.

Australian companies are likely to deliver smaller dividends in what is forecast to be the country’s worst earnings season in a decade because of the coronavirus pandemic, with even firms that benefited from the upheaval expected to show caution, Reuters reported. Fund managers and analysts expect the corporate results season that begins this week to reveal an overall decline in profits of around one-fifth due to the abrupt shutdowns that followed the virus outbreak.

The number of business insolvencies among German companies decreased by 9.9 percent in May year-on-year to just above 1,500, the country's Federal Statistical Office (Destatis) announced on Monday, Xinhuanet reported. However, economic problems caused by COVID-19 had not yet been reflected by an increase in insolvencies due to the government suspension of filing for insolvency implemented in March, Destatis noted.

The national government wants Buenos Aires Province to be the first to resolve debt restructuring talks after its own sovereign bond agreement, according to sources with direct knowledge of the matter, the Buenos Aires Times reported. The government's strategy is to prevent debt restructuring talks from other provinces from complicating negotiations related to Buenos Aires Province. thus preventing creditors from demanding better conditions, said the individuals, who asked not to be identified because the negotiations are private.

Payment freezes on personal loans are masking the true nature of deteriorating personal finances, an insolvency expert has warned, Peer2Peer Finance News reported. Analysis by debt industry data company TDX Group found the volume of individual voluntary arrangements (IVAs) and trust deeds decreased by 39 per cent between the first and second quarter of 2020 and is down 38 per cent annually. However, David Heathcote, personal insolvency expert at TDX Group, is predicting a steep rise in the fourth quarter and next year as borrowers come off payment holidays.

Germany’s ruling coalition is at odds over extending a freeze on insolvency rules put in place to avoid a wave of corporate bankruptcies due to the coronavirus crisis, Reuters reported. In March the government gave companies that find themselves in financial trouble due to the pandemic a respite by allowing them to delay filing for bankruptcy until the end of September.

The level of corporate insolvencies in Ireland may peak next year at levels last seen at the end of the financial crisis as the real cost of the Covid-19 economic shock on businesses becomes apparent, according to a leading insolvency expert, The Irish Times reported. “In the short-term my prediction is that insolvency numbers will return in 2021 to the worst numbers of the last recession,” said Neil Hughes, insolvency practitioner and managing partner of Baker Tilly Chartered Accountants in Ireland.

The National Company Law Appellate Tribunal (NCLAT) has upheld an NCLT order setting aside a plea to initiate insolvency proceedings against Gujarat Ambuja Exports Ltd, Business Standard reported. A three-member NCLAT bench upheld the order of the Ahmedabad bench of the National Company Law Tribunal (NCLT), which had set aside the plea of Samay Impex, an operational creditor of Gujarat Ambuja Exports Ltd (GAEL).

The true financial cost of Covid-19 is something India would rather not acknowledge, let alone bear — at least not until the pandemic has played out. That explains why the central bank on Thursday allowed a one-time restructuring of corporate and personal loans that have been under stress ever since Prime Minister Narendra Modi put the country under a severe lockdown in March, Bloomberg News reported in a commentary. Those nationwide restrictions have given way to more localized containment. But with India becoming only the third country after the U.S.