An investigation into Coffee Day Enterprises Ltd., initiated by its board after the death of founder V.G. Siddhartha, is likely to conclude that at least 20 billion rupees ($270 million) is missing from its accounts, according to people familiar with the matter. The months-long probe following the suicide of Siddhartha in July examined the financial transactions of India’s largest coffee chain and its dealings with dozens of private companies owned by the entrepreneur, Bloomberg News reported.
India
Read more
With the Rajya Sabha giving its nod, Parliament today passed amendments to the insolvency law that will help ring-fence successful bidders of insolvent companies from risk of criminal proceedings for offences committed by previous promoters, The Tribune reported. The Rajya Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2020, by a voice vote today, after it was approved by the Lok Sabha on March 6. The Bill will now replace an ordinance after it gets a presidential stamp.
Indian authorities’ takeover of one of the country’s largest private banks could wipe out more than $1bn in high-risk bonds, dealing a blow to the mutual funds that piled into the market and leaving other lenders struggling to raise money, the Financial Times reported. The Reserve Bank of India last week took over Yes Bank, a once high-flying private lender that experienced a sharp rise in bad loans, after the bank struggled to find investors to shore up its capital base.
India’s cash-strapped tycoons may need to ready more yard sales of their crown jewels as stock volatility and ongoing credit market uncertainty pressure their ability to pay loans. At issue is the loans that Indian business leaders often take against the backing of their main assets - stakes in their listed firms, Bloomberg News reported. The value of such pledged shares has shrunk as the coronavirus outbreak triggered a sell-off globally in risk assets and domestic credit troubles deepened, as evidenced by last week’s seizure of Yes Bank Ltd. by the central bank.
Indian criminal investigators have accused Yes Bank’s co-founder Rana Kapoor of receiving illicit kickbacks in 2018 to provide funds to a now bankrupt housing finance company, raising new questions about the troubled institution’s lending practices, the Financial Times reported. Mr Kapoor — who was forced to stand down as Yes Bank chief executive and managing director in early 2019 amid growing governance concerns — was arrested on Sunday morning, just days after the Reserve Bank of India seized control of the lender he founded.
Of all the private banks set up during India’s go-go-years early in the new millennium, Yes Bank was the most ambitious and aggressive, the Financial Times reported. Founded by two career banking professionals who married sisters, Yes Bank had a reputation for taking risks spurned by India’s more conservative private lenders. Initially the scale of its ambitions — as embodied by flamboyant managing director Rana Kapoor — made it a darling among foreign investors, who provided Yes with a tide of growth capital as they looked to bet big on India’s economic ascent.
Global rating agency Standard and Poor’s has downgraded ratings for Jain Irrigation Systems Ltd to 'D' — default grade on missing to make interest payment on securities issued by its subsidiary, Business Standard reported. The company failed to make the interest payment on its guaranteed 2022 senior unsecured notes issued by its subsidiary Jain International Trading BV. The interest payment was due on February 1, 2020, and the 30-day grace period ended on March 3, 2020, S&P said in a statement.
India seized the beleaguered Yes Bank Ltd., capped withdrawals and imposed curbs on its operations, pledging to implement a rescue plan within 30 days as the lender’s woes threatened to destabilize the financial system, Bloomberg News reported. The Reserve Bank of India ordered the lender not to extend new loans or make payments for its liabilities, according to a statement. It also curbed withdrawals to 50,000 rupees ($682) for the next 30 days. The overthrow of Yes Bank’s board will help authorities implement a revival plan after numerous attempts by the lender to raise capital failed.
The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted Rajahmundry Godavari Bridge, a subsidiary of Gammon Infrastructure, for Corporate Insolvency Resolution Process (CIRP), The Financial Express reported. Vishal Ghisulal Jain has been appointed as the resolution professional for the process. The company (RGBL) had entered into a concessions agreement with Andhra Pradesh Road Development Corporation (APRDC) for design, construction, finance, operations and maintenance of a 4.15-kilometre long four-lane bridge across the river Godavari.