The NCLT ruling in the case of Sterling SEZ and Infrastructure Ltd has raised hopes of lenders who are unable to sell properties of defaulting borrowers attached by the Enforcement Directorate (ED) under the Prevention of Money Laundering law. The NCLT held the ED’s attachment order as invalid and directed it to release the assets. It held that the resolution professional can take charge of the properties and deal with them as per the insolvency law. Sterling SEZ is part of the Vadodara-based Sterling Biotech group, with total credit facilities of Rs 8,100 crore and whose promoters have fled India.
The ICAI Accounting Research Foundation (ICAI ARF), a not-for-profit entity will oversee the process of reopening the books of crisis-hit IL&FS. The board of debt-laden IL&FS was taken over by the corporate affairs ministry (MCA) last year after many group entities defaulted on their debt obligations. The ICAI ARF can outsource the assignment to ensure it is over within a reasonable period of time, ICAI release said. The IL&FS group has a total debt of over Rs 91,000 crore. Last month, the NCLT had approved reopening of the books of IL&FS and its two subsidiaries from 2012-13 to 2017-18.
The NCLT, Mumbai bench, in a first of its kind, on February 6 barred Mukesh Choksi from being appointed as an auditor of any company for a period of five years, after it found him guilty of attesting Zen Shaving Ltd’s financial statements without due examination and colluding with the company’s promoters in a fraudulent manner. To a series of basic questions asked such as the last date of AGM, Choksi replied ‘I don’t know.’ Zen Shaving is accused of siphoning off IPO proceeds after failing to list its securities on the Pune stock exchange in 1996.
The Supreme Court has ruled that National Company Law Tribunal (NCLT) has no authority to evaluate the commercial decision of the committee of creditors (CoC) in insolvency cases. The CoC reserves the sole right with complete autonomy to approve or reject a proposed resolution plan. The court further said that there is no provision in the IBC that empowers the resolution professional, the adjudicating authorities (NCLT & NCLAT), to reverse the “commercial decision” of the CoC. Upon rejection of a resolution plan, the NCLT is obligated to initiate liquidation process under Section 33(1) of the IBC, it said.
According to a report, timely resolution of insolvency cases within the mandated 180-270 days can unlock additional Rs 67,000 crore. Since the bankruptcy law came into effect from May 2016, close to 3,000 companies have been sent to various NCLTs for resolution of which only 586 have been resolved so far while 63 have been withdrawn after the law was amended last year. According to Icra, as of December 2018, as many as 898 corporate insolvency cases are awaiting a resolution. Up to December 2018, only 79 cases have yielded a resolution, helping the lenders realise close to Rs 65,000 crore.
The National Company Law Appellate Tribunal (NCLAT) has reserved its judgement over the petition filed by traders' body CAIT against fair trade regulator CCI's nod to Walmart's $16-billion acquisition of Flipkart. NLCAT’s two-member bench concluded its hearing on Thursday (January 25) after taking note of submissions made by both sides. Previously, On August 29, 2018; Confederation of All India Traders (CAIT) had filed a petition against CCI in the NCLAT asking for the reversal of the Walmart-Flipkart agreement. Meanwhile, Flipkart is working on getting in order for its operational model under the new changes of FDI policy in e-commerce.
The Ministry of Corporate Affairs (MCA) is in discussion with the Comptroller and Auditor General (CAG) to appoint auditors to re-examine the books of accounts of IL&FS and its two subsidiaries IFIN and ITNL. Early this month, NCLT, Mumbai had ordered to reopen book of accounts of IL&FS and the two subsidiaries from FY12-13 to FY17-18. MCA had filed a plea before the tribunal to reopen the accounts based on interim findings by ICAI and SFIO which pointed to accounts manipulation. This is the first order where NCLT, Mumabi has ordered to re-open the books of accounts of any company.