An Indian bankruptcy court has to decide on a Rs 10,000-crore question in the case of Reliance Communications Ltd. The decision will have a bearing on the single most important asset of the telecom service provider—its telecom licence, Bloomberg News reported. RCom is under insolvency proceedings before the Mumbai bench of the National Company Law Tribunal and has been under moratorium since May 15, 2018. The company has spent over Rs 10,000 crore to acquire spectrum, Senior Advocate Ravi Kadam informed the tribunal.
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The government’s move to amend the insolvency law to allow pre-packaged insolvency resolution plans for micro, small and medium enterprises (MSME) with defaults of not more than ₹1 crore is welcome, according to a commentary in the Economic Times of India. The Insolvency and Bankruptcy Code (Amendment) Bill, 2021, that seeks to replace an Ordinance, will enable the creditor and the debtor to informally work on a rehabilitation plan (instead of financial bidding) without a bankruptcy court’s involvement.
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The government on Monday introduced a bill in the Lok Sabha to amend the insolvency law and provide for a pre-packaged resolution process for stressed MSMEs, the Economic Times of India reported. The proposed amendments would enable the government to notify the threshold of a default not exceeding Rs 1 crore for initiation of pre-packaged resolution process. The government has already prescribed the threshold of Rs 10 lakh for this purpose.
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A British court on Monday granted a bankruptcy order against Vijay Mallya, paving the way for a consortium of Indian banks led by the State Bank of India (SBI) to pursue a worldwide freezing order to seek repayment of debt owed by the now-defunct Kingfisher Airlines, the Financial Express reported. “As at 15.42 [UK time], I shall adjudicate Dr Mallya bankrupt,” Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs said in his ruling during a virtual hearing of the Chancery Division of the High Court.
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India’s Supreme Court rejected petitions by telecom companies seeking a reassessment of how much they owe the government, a two-decade-long dispute that threatens the survival of cash-strapped Vodafone Idea Ltd., Bloomberg News reported. A two-judge panel headed by L. Nageswara Rao on Friday dismissed the petitions by Vodafone Idea and Bharti Airtel Ltd. “All applications are dismissed,” Rao said without without giving reasons. A detailed copy of the order is awaited. During the previous hearing, judges referred to a verdict last year that said no recalculation would be allowed.
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The Insolvency and Bankruptcy Board of India (IBBI) has revised the eligibility requirements of insolvency professionals hired to run companies undergoing bankruptcy proceedings, Mint reported. Insolvency professionals are required to have experience in any of the professional fields such as management, law, chartered accountancy, company secretaryship, or cost accounting. The new changes give more flexibility to professionals given that some of the professionals may have experience in more than one discipline.
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The Insolvency and Bankruptcy Code (IBC) has completed five years, and critics have focused mainly on two issues: large write-offs of loans by the banks and undue losses to stakeholders like employees and minority shareholders, The Print reported. On both these issues, fears and allegations that the IBC has been a failure are not supported by facts or rationale. Let us see why these are misplaced beliefs. The job of creditors is to generate a return in exchange for the risk arising from the disbursement of loans. So, unless it is too high, loss on loans is not an unusual incident.
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Stressed steel plants, acquired under the Insolvency and Bankruptcy Code (IBC) resolution process, are seeing faster returns, Swarajya reported. Despite pandemic-linked blips, domestic demand outlook remains strong, which has helped acquirers ramp up utilization levels. The ongoing steel upcycle will also mean stronger-than-expected realizations over the medium term. Consequently, acquirers may see 20 per cent faster payback and are well set to tap the brownfield potential housed under these assets.
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Indian farmers, protesting against new agriculture laws they say threaten their livelihoods, started a sit-in near parliament in the capital, renewing a push for a repeal of the laws, Reuters reported. In the longest-running growers' protest against Prime Minister Narendra Modi's government, tens of thousands of farmers have camped out on major highways leading to New Delhi for more than seven months.
More than 1.5 million children worldwide saw a parent, custodial grandparent or other relative who cared for them die from COVID-19, according to a study published by the Lancet, UPI reported. Of these children, more than 1 million experienced one or both parents dying during the first 14 months of the pandemic, and another 500,000 experienced the death of a grandparent caregiver living in their own home, the data showed.