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Byju's Founder <keyword id="1702989" type="General" weightage="100" keywordseo="Byju-Raveendran" source="Orion">Byju Raveendran</keyword>'s plea against the insolvency of <keyword id="19901241" type="General" weightage="20" keywordseo="Think-Learn" source="keywords">Think &amp; Learn</keyword> before the NCLAT was adjourned on Monday, as one of the members of the bench recused from the hearing. The matter will be placed before a bench headed by <keyword id="19916403" type="General" weightage="20" keywordseo="National-Company-Law-Appellate-Tribunal" source="keywords" meta.keywordsubtype="org" meta.entityname="National Company Law Appellate Tribunal" meta.hostid="345" meta.entityid="National Company Law Appellate Tribunal">National Company Law Appellate Tribunal</keyword> (NCLAT) Chairman Justice Ashok Bhushan, who will assign a different bench to hear the matter. Raveendran had filed a petition challenging the initiation of <keyword id="19965539" type="General" weightage="20" keywordseo="insolvency-proceedings" source="keywords">insolvency proceedings</keyword> against Think &amp; Learn, which runs edtech company Byju's. The matter was listed on Monday before a two-member Chennai-based bench of the NCLAT comprising Justice Sharad Kumar Sharma, Member (Judicial), and Jatindranath Swain, Member (Technical). However, Justice Sharma recused himself from the hearing, saying he had appeared as the counsel for the Board of Control for Cricket in India (<keyword id="19901245" type="General" weightage="20" keywordseo="BCCI" source="keywords" meta.keywordsubtype="org" meta.entityname="BCCI" meta.hostid="345" meta.entityid="BCCI">BCCI</keyword>) before his elevation. "I have appeared as a senior counsel for (the) BCCI. Since they are the main beneficiaries of this order, I cannot take this up," said Sharma. The Bengaluru bench of the National Company Law Tribunal (<keyword id="19901085" type="General" weightage="20" keywordseo="NCLT" source="keywords">NCLT</keyword>) on July 16 directed Corporate Insolvency Resolution Proceedings (CIRP), admitting the plea filed by the BCCI. The BCCI had approached the NCLT under the Insolvency and Bankruptcy Code (IBC) over a default of Rs 158.9 crore by Think &amp; Learn -- once India's most valuable startup worth an estimated $22 billion. NCLT has suspended the board of Think &amp; Learn Pvt Ltd as per the provisions of the IBC and had appointed an interim resolution professional (IRP) to take care of the debt-ridden firm. Raveendran challenged the NCLT order before the appellate tribunal NCLAT. He has also approached the Karnataka High Court. The high court had, on July 26 deferred Raveendran's plea to July 30. At the high court, Raveendran challenged the validity of the order and suspension of the NCLT order till the NCLAT hears the appeal.

NCLAT judge recuses from hearing Raveendran's plea against insolvency proceedings of Byju

India’s banks can breathe a sigh of relief. On May 8th, a UK court upheld a decision by the <keyword id="6511712" type="ORGANIZATION" weightage="20" keywordseo="karnataka-debt-recovery-tribunal">Karnataka Debt Recovery Tribunal</keyword> regarding <keyword id="6360137" type="COMPANY" weightage="20" keywordseo="kingfisher">Kingfisher</keyword> tycoon <keyword id="14678" type="PERSON" weightage="20" keywordseo="Vijay-Mallya">Vijay Mallya</keyword>’s outstanding dues and maintained a worldwide freeze on his assets. The freeze will prevent Mallya from selling any assets in the England and Wales. Mallya is wanted in India for suspected fraud and money laundering. As a result, a consortium of 13 Indian banks - which includes the state-owned <keyword id="6354731" type="UNKNOWN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword>, IDBI Bank and Punjab National Bank - who extended loans to Mallya’s now-defunct Kingfisher Airlines will be able to to collect $1.55 billion worth of claims against his assets in the UK. The prosecution, which was representing the banks, successfully argued that Mallya “willfully defaulted” on the loans in spite of his considerable financial resources. The case reportedly marked the first time a ruling by an Indian tribunal had been registered in a UK court. Most importantly, it sets a precedent wherein a worldwide freeze can be imposed on a <keyword id="2168141" type="PERSON" weightage="20" keywordseo="Wilful-defaulter">wilful defaulter</keyword>’s assets. The ruling will also give the Indian government’s extradition proceedings against Mallya, which are expected to conclude in July 2018, a much-needed boost. To add insult the injury, the UK court has also barred Mallya’s legal team from appealing the ruling. If they wish to seek recourse, they will have no option but to directly petition the UK’s Court of Appeals. Mallya was <a href="https://www.nytimes.com/2017/04/18/business/vijay-mallya-extradition.html">arrested in April 2017 </a>on an extradition warrant over charges of defrauding his Indian creditors of $1.4 billion in loans. Currently out on bail, he has been absconding in England since March 2016 and refuses to come back to India over fears of an unfair trial. He has several cases pending against him in India over money laundering, tax evasion and credit defaults.

UK court allows Indian banks to collect claims worth $1.55 billion from tycoon Vijay Mallya

The government is making it easy for people to deal with bankruptcy. So unlike now, someone who fails to repay loan of a bank cannot be bogged down and made to pay up at once. Learning from various incidents, the government is now coming up with ways to tackle bankruptcy and making the individual pay in a structural way. "There is huge social stigma attached to this. So, you cannot be punitive. People should be allowed to restructure their lives, " <keyword id="280838" type="PERSON" weightage="20" keywordseo="Sumant-Batra">Sumant Batra</keyword>, managing partner and head of the insolvency, secured transactions &amp; corporate law practice at law firm Kesar Dass B &amp; Associates told the ET. Under current laws, banks would approach <keyword id="5011762" type="UNKNOWN" weightage="20" keywordseo="debt-recovery-tribunals">Debt Recovery Tribunals</keyword> (DRTs) under the Securitisation and <keyword id="3398470" type="UNKNOWN" weightage="20" keywordseo="reconstruction-of-financial-assets">Reconstruction of Financial Assets</keyword> and Enforcement of Security Interest Act (<keyword id="6538200" type="UNKNOWN" weightage="20" keywordseo="Sarfaesi">Sarfaesi</keyword>), which are aimed at recovering the dues. While the Insolvency and Bankruptcy Code (<keyword id="192838" type="ORGANIZATION" weightage="20" keywordseo="IBC">IBC</keyword>), enacted by <keyword id="6354721" type="ORGANIZATION" weightage="20" keywordseo="parliament">Parliament</keyword> last year, provides for individuals to be declared bankrupt, so far, action has been confined to the corporate sector and start-ups.

This is how you can declare yourself bankrupt in India if you can’t repay loan

New Delhi, Mar 2 () Asserting that recovery through insolvency law process has been better, IBBI chief M S Sahoo has said creditors have recovered Rs 1.6 lakh crore, which is 207 per cent of the realisable value of assets of 190 companies rescued till December last year under it. The Insolvency and Bankruptcy Code (IBC), which came into effect in 2016, provides for a time-bound and market-linked resolution of stressed assets. In case, the resolution does not happen, the company concerned goes for liquidation. Sahoo, Chairperson of the Insolvency and Bankruptcy Board of India (IBBI), said incidental recovery has been pretty good under the Code. "190 companies have been rescued till December 2019 through resolution plans. They owed Rs 3.8 lakh crore to creditors. "However, the realisable value of the assets available with them, when they entered the IBC process, was only Rs 0.77 lakh crore. Thus, the amount the companies owed to creditors was not backed by assets on the ground," he said. Noting that the Code maximises the value of the assets on ground and not of the assets which do not exist, Sahoo said creditors recovered Rs 1.6 lakh crore, which is 207 per cent of the realisable value of assets of the companies. "Any other option of recovery or liquidation would have recovered at best Rs 100 minus the cost of recovery/ liquidation, while the creditors recovered Rs 207 under the IBC. The excess recovery of Rs 107, in addition to rescue of the companies, is bonus on account of the IBC," Sahoo told in an interview. According to him, financial creditors had to take a haircut of 57 per cent compared to their claims and that reflects extent of value erosion by the time the companies entered IBC process. "It is important to note that the 190 companies resolved under the IBC include 66 companies which were defunct or in BIFR (Board for Industrial and Financial Reconstruction)," he added. When asked whether the success of the IBC is not just in numbers, Sahoo said given the behavioural change, the performance should be seen in totality. It should be seen in terms of "what happens under the IBC, what happens on account of the IBC and what happens in the shadow of the IBC," he said. "190 companies were rescued, while 780 companies were referred for liquidation. Thus, the number of companies getting into liquidation is four times that of companies being rescued. These 190 companies, however, had assets, which is four times of the assets of the 780 companies. "Thus, asset rescued is four times compared to those referred to liquidation. Importantly, of the companies rescued, one-third were under BIFR or defunct. Of the companies that proceeded for liquidation, three-fourths were under BIFR or defunct," the IBBI chief said. So far, around 3,600 companies have been admitted for resolution under the IBC. Out of them, about 200 have been resolved through resolution plans and 800 gone for liquidation. Around 150 applications have been withdrawn. A company is taken up for resolution under the IBC after approval from the National Company Law Tribunal (NCLT). "As compared to other options, recovery through the IBC process has been better," Sahoo said. Citing an RBI data, he said it indicates that in 2018-19, banks recovered 5.3 per cent, 3.5 per cent, 14.5 per cent and 42.5 per cent of the amount involved through Lok Adalats, DRTs (Debt Recovery Tribunals), SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) and the IBC, respectively. "Credible threat of the IBC process that a company may change hands has changed behaviour of the debtors. Thousands of debtors are settling defaults in early stages of the life cycle of a distressed asset," Sahoo said. Further, the IBBI chief said stakeholders, who understand business and who have backing of sophisticated professionals, are using the IBC with open eyes, after evaluating all options. "They are taking decisions whether to use IBC and when to use, and whether to accept a resolution plan or to liquidate a company, under the facts and circumstances of each case. If they do not find value in IBC in case of a company, they would not use it," he added. RAM ANUANU

Recovery through insolvency process better compared to other options: IBBI chief

<ul><li>It’s been three years since the Insolvency and <keyword id="43550" type="EVENT" weightage="20" keywordseo="Bankruptcy">Bankruptcy</keyword> Code (<keyword id="192838" type="ORGANIZATION" weightage="20" keywordseo="IBC">IBC</keyword>) was implemented, and while progress hasn’t been as swift as expected, the results so far are still formidable. </li><li>Nearly ₹700 billion of recoveries took place in 2018-19, according to a report by <keyword id="6359483" type="COMPANY" weightage="20" keywordseo="Crisil">CRISIL</keyword>. This was twice as much as the ₹355 billion that was recovered in 2017-18 through other debt recovery schemes such as Debt Recovery Tribunal (DRT) and the SARFAESI Act. </li><li>However, the average resolution time for a case stood at 324 days, well over the maximum amount of 270 days as stipulated in the code.</li></ul> It’s been three years since the Insolvency and Bankruptcy Code (IBC) was implemented, and while progress hasn’t been as swift as expected, the results so far are still formidable. Nearly ₹700 billion of recoveries took place in 2018-19, according to a report by CRISIL. This was twice as much as the ₹355 billion that was recovered in 2017-18 through other government debt recovery schemes such as Debt Recovery Tribunal (DRT) and the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act. In fact, the recovery rate for 94 cases in 2018-19 was 43% and recoveries were twice as much as the overall liquidation value for assets in said cases, according to CRISIL’s President, Gurpreet Chhatwal. In comparison, the other schemes had a recovery rate of 25.2%. As a result, the build up in India’s <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword> has decelerated in the recent past. CRISIL pegged the bad loan ratio at Indian banks at around 10% by the end of March 2019, compared with 11.5% at the end of March 2018. However, the report wasn’t all cheers and hurrays. CRISIL found that the average resolution time for a case stood at 324 days, well over the maximum amount of 270 days as stipulated in the code. Moreover, there are still 1,143 cases pending resolution, a third of which have been on the backburner for longer than nine months. This is likely because the <keyword id="6354457" type="ORGANIZATION" weightage="20" keywordseo="National-Company-Law-Tribunal">National Company Law Tribunal</keyword> (NCLT), the judicial authority to facilitate resolution proceedings, does not have <a href="https://www.businessinsider.in/sc-slams-govt-for-lack-of-staff-at-nclt/articleshow/68594331.cms">sufficient resources</a>. In March, India’s Supreme Court had criticised the government for inadequate staffing and delays in hiring at the NCLT. This was corroborated by <a href="https://www.moneylife.in/article/the-ibc-is-going-the-way-of-previous-failed-laws-on-bad-loan/57121.html">a report</a> by MoneyLife, which found that banks were searching for other resolution options owing to the long delays and extensive litigation under the IBC. That being said, the IBC has had its fair share of champions among India’s corporate world as well as its politicians. In <a href="https://www.facebook.com/notes/arun-jaitley/two-years-of-insolvency-and-bankruptcy-code-ibc/938314493023766/">a post</a> titled, “Two years of insolvency and Bankruptcy Code (IBC),” in early January, Arun <keyword id="6390789" type="PERSON" weightage="20" keywordseo="jaitley">Jaitley</keyword> said that as much as ₹800 billion worth of funds had been recovered following the resolution of 66 cases by the NCLT. Looking ahead to the current financial year, Jaitley expected around ₹700 billion of additional recoveries to take place. SEE ALSO: <a href="https://www.businessinsider.in/indias-finance-minister-touts-the-success-of-the-countrys-recently-implemented-bankruptcy-code-but-it-still-requires-significant-improvement/articleshow/67382165.cms">India’s finance minister touts the success of the country’s recently-implemented bankruptcy code — but it still requires significant improvement</a> <a href="https://www.businessinsider.in/sc-slams-govt-for-lack-of-staff-at-nclt/articleshow/68594331.cms">India's Supreme Court slams the government for leaving the country's bankruptcy court short-staffed</a>

Indian banks are recovering over 1.5 times as much money under the bankruptcy code —  but it's still painfully slow

<ul><li>SEBI is planning to tag defaulters as 'difficult to recover' if it's virtually impossible for them to pay back their loan.</li><li>The tag will also be used for individuals found be 'untraceable' and with cases in multiple courts.</li><li>The proposal will be presented at SEBI's next board meeting in the coming week.</li></ul> Capital market regulator SEBI is planning to attach a 'difficult to recover' tag for individual defaulters who are found to be 'untraceable' as also for cases facing parallel proceedings by other agencies or in various courts and tribunals. The proposal, likely to be discussed at SEBI's board meeting next week, is aimed at better utilisation of resources towards cases with higher chances of recovery, a senior official said. This separate 'difficult to recover' category is for cases where recovery of penalties and other dues from defaulters proves to be virtually impossible and the amount involved is not found to be worth an attempt beyond a point. However, SEBI can initiate or continue its prosecution proceedings against the defaulters even after such a segregation and recovery procedure can be reopened in case there is any change in the prevailing parameters regarding the defaulter. The regulator is now considering a modification to its policy on 'difficult to recover' dues to include the criteria of 'untraceable' for individuals and 'parallel proceeding barring recovery', the official said. In case of individuals, the existing policy provides for this classification for a person who has died leaving behind no assets and those who are alive but have no attachable assets or have become insolvent. However, the income tax department rules for 'difficult to recover' cases has two more categories -- individuals who are untraceable and those who have left India. The official said that SEBI did not include these categories earlier as it did not have enough data with respect to the cases involving untraceable individuals, while the final category became redundant after promulgation of the Fugitive Economic Offenders Act. However, its analysis of pending recovery cases has now shown that many cases involving untraceable individual defaulters are fit for being declared 'difficult to recover'. In case of companies, this classification applies to those having gone into liquidation or insolvency proceedings or are defunct, as also entities whose directors, promoters, partners or representatives have no attachable assets. Regarding foreign companies, this category includes those having no presence, place of business, management, representative or attachable assets in India. The Securities and Exchange Board of India (SEBI) has got powers to recover money from various entities by way of passing orders for refund of money to investors, disgorgement of funds to be distributed to investors, and also collect fees and penalties levied by it. Since getting the recovery powers in 2013, SEBI has initiated recovery proceedings against a large number of defaulters, but it has experienced difficulties during the execution of these proceedings in certain cases. According to officials, difficulties mainly arise due to the defaulter being insolvent or financially unsound without having any attachable assets, or being a company whose assets or directors/ promoters are not traceable, as also individual defaulters being untraceable. In some cases, the dues remain unrecovered even after executing all modes of recovery. Earlier, SEBI norms did not provide for declaring any unrecovered dues as 'difficult to recover' and therefore all the proceedings used to remain in force along with other recoverable cases, thus hindering optimal utilisation of resources for cases with better chances of recovery, officials said. In 2018, SEBI had formulated this policy, after taking cues from the procedure followed by the income tax department, following extensive consultations with the Finance Ministry, the Reserve Bank of India and the Corporate Affairs Ministry, but it has always been made clear that it should not be seen as "scaling down or writing off" of the dues. Out of 2,500 recovery orders passed by SEBI so far, as many as 1,790 recovery certificates were pending (at end of November 2019). Out of these, 136 were found fit to be declared 'difficult to recover', though not a single case has been put in that category as yet because the final verification of the steps are being carried out by newly appointed recovery officers prior to any such categorisation. Out of the total 1,790 pending cases, the maximum number of 1,308 cases are pending at a stage after attachments of bank, demat and mutual fund accounts as the funds or securities available are not sufficient. Also, 301 of them are 'defunct' (17 per cent) and 254 have been found to be 'untraceable' (14 per cent). Besides, the 136 cases that are fit to be treated as 'difficult to recover', as many as 97 are 'untraceable' for reasons including of failure to serve demand notice despite best efforts, non-availability of demat or bank account details, non-existence of right address and even PAN details being unavailable. Besides, SEBI is also proposing a 'difficult to recover' tag for cases facing 'parallel proceedings' before various judicial and quasi-judicial fora such as National Company Law Tribunal, special courts, debt recovery tribunals, as also cases where stay on recovery has been granted by high courts or the supreme court, or where parallel attachment has been done by agencies like ED, Tax Department, EPFIO etc. Out of the total 1,790 pending recovery cases, SEBI found that parallel proceedings were pending in 90 cases with some facing multiple litigations. In cases where insolvency and bankruptcy proceedings have commenced, SEBI has no scope of recovery as the Insolvency and Bankruptcy Code prevails over the SEBI Act. See also: <a href="https://www.businessinsider.in/you-may-earn-up-to-1-crore-with-a-tip-off-on-insider-trading-sent-to-sebi-conditions-apply/articleshow/69729976.cms">You may earn up to ₹1 crore with a tip-off on insider trading sent to SEBI — conditions apply</a> <a href="https://www.businessinsider.in/india/news/indian-stock-market-regulator-wants-to-use-ai-to-curb-manipulation/articleshow/73570976.cms">Indian stock market regulator wants to use AI to curb manipulation</a> <a href="https://www.businessinsider.in/business/news/sebi-to-hire-independent-agencies-to-dispose-of-attached-assets/articleshow/73517907.cms">SEBI to hire independent agencies to dispose of attached assets</a>

SEBI wants to tag defaulters as "difficult to recover" where recovery is virtually impossible

The Ministry of Corporate Affairs, in conjunction with the Insolvency and <keyword id="43550" type="EVENT" weightage="20" keywordseo="Bankruptcy">Bankruptcy</keyword> Board of India - which oversees the country’s bankruptcy code - are currently drawing up a scheme that is expected to benefit small businesses - partnerships and proprietors alike. The “individual insolvency” scheme is slated to be the next big addition to India’s Insolvency and Bankruptcy Code (<keyword id="192838" type="ORGANIZATION" weightage="20" keywordseo="IBC">IBC</keyword>), replacing India’s existing personal bankruptcy laws. Under the scheme, borrowers will get automatic relief for any unsecured loans that they are not able to repay and will also secure protection for some of their assets from seizure. Who all are eligible? The scheme is primarily targeted at the country’s <keyword id="45092" type="COMPANY" weightage="20" keywordseo="farmers">farmers</keyword>, artisans, small <keyword id="53533" type="COMPANY" weightage="20" keywordseo="entrepreneurs">entrepreneurs</keyword> and subsistence workers. Unlike limited liability businesses, small entrepreneurs don’t have protection against their personal assets. Individuals with an annual income of ₹60,000 or less and assets worth up to ₹20,000 are eligible. The scheme extends to small borrowers with outstanding loan payments of up to ₹35,000. Why now? The financial rationale behind the scheme is that that cost of recovering dues is more than the outstanding payments due. Of course, it will likely be announced as a new bankruptcy reform once elections are over, which will earn the incoming administration some goodwill from the country’s poorest. This, in addition to the spate <a href="https://www.businessinsider.in/arun-jaitleys-budget-2019-may-offer-more-income-support-and-cheap-loans-to-indias-farmers/articleshow/67538156.cms">of cash transfer schemes</a> for farmers, will also give a boost to rural demand. How will it work? A borrower that is on the cusp of default will have to make an application under the scheme. Thereafter, his or her case will be heard by a debt recovery tribunal that will take the creditor’s views into account. If the borrower is deemed to be eligible for relief, his or her outstanding loans are waived. A record of this will, however, be documented in the borrower’s credit history. Alternatively, the borrower and the lender might be able to negotiate a new repayment plan. Failure to repay will result in the liquidation of the borrower’s assets. When will the scheme come into effect? The new <keyword id="692372" type="PERSON" weightage="20" keywordseo="debt-relief">debt relief</keyword> scheme will <a href="https://economictimes.indiatimes.com/news/economy/policy/universal-debt-relief-scheme-on-cards-for-small-borrowers/articleshow/69300097.cms">reportedly</a> be implemented in three months time once the next government has taken over. What is the cost of the scheme? The scheme is expected to cost the Exchequer around <a href="https://economictimes.indiatimes.com/news/economy/policy/universal-debt-relief-scheme-on-cards-for-small-borrowers/articleshow/69300097.cms">₹200 billion</a>. SEE ALSO: <a href="https://www.businessinsider.in/politically-driven-financially-unsound-the-loan-waivers-offered-by-indias-political-parties-will-only-serve-to-worsen-the-countrys-bad-loan-crisis/articleshow/67190737.cms">Politically driven, financially unsound: The loan waivers offered by India’s political parties will only serve to worsen the country’s bad loan crisis</a>

Here's how the government’s new debt relief scheme for small business owners will work

New Delhi, Jul 9 () Chemicals maker BASF India Ltd on Thursday said it has received a tax demand notice of Rs 46 crore from the Karnataka government. The company said that it had earlier got demand notices from the Commercial Tax Department, Karnataka, aggregating to Rs 620.93 crore (including interest and penalty) for the periods 2006-2007 to 2014-2015 by treating the stock transfers of the company's Mangalore plant as interstate sales to dealers. BASF also said that it got a stay order from Karnataka Appellate Tribunal on recovery of demand for the periods 2006-2007 to 2010-2011 and 2014-2015. "The Company has now received a demand notice for the further period i.e. 2015-2016 from Commercial Tax Department, Karnataka, aggregating to Rs 46.01 crore (including interest and penalty) by treating the stock transfers of its Mangalore Plant as interstate sales to dealers," BASF India said in a regulatory filing. The company is in the process of filing its detailed reply/submission/appeals in response to the demand notice, it added. "The company, based on the legal assessment, does not consider these stock transfers as interstate sales and is taking all the necessary legal steps to defend the matter," the filing said. MJH MR

BASF India gets Rs 46 cr tax notice from Karnataka govt

<ul><li>A consortium of banks, led by <keyword id="6354731" type="UNKNOWN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword>, are planning to form an asset management company to take over and restore the financial health of 14 stressed <keyword id="44011" type="CITY" weightage="20" keywordseo="power">power</keyword> plants. </li><li>Since these banks are the main creditors to the firms operating these power projects, they stand to lose the most from the liquidation of these assets. </li><li>The Indian government has identified 34 stressed power plants. These assets account for over 40,000 megawatts of power generation and a ₹1.74 trillion in credit from India’s banks.</li></ul>After a rescue plan for stressed power assets involving a joint venture by state-owned firms like NTPC and Rural Electrification Corp failed to materialise, a group of creditors, led by the State Bank of India, are taking matters into their own hands. The banks are joining forces to prevent 14 power plants from going under - which will endanger the recovery of billions of dollars worth of loans. Since they are the main creditors to the firms operating these power projects, such as IndiaBulls and KSK Energy, the banks stand to lose the most from the liquidation of these assets. The move has national implications. There are currently 34 stressed power plants that have been identified by the government. These assets account for over 40,000 megawatts of power generation - a lot of electricity for Indian homes and businesses - and a staggering ₹1.74 trillion in credit from India’s banks, which already <a href="https://www.bloombergquint.com/markets/2018/03/29/banks-brace-for-earnings-impact-on-rbis-toughened-bad-loan-stance">have more than ₹9 trillion</a> in <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword>. If they aren’t rescued, India’s non-performing loan problem will go from bad to worse, further endangering the state of our finances. Swapping <keyword id="44647" type="ORGANIZATION" weightage="20" keywordseo="debt">debt</keyword> for equity These banks have decided to form an asset management company that will take up the ownership of these 14 plants. According to a report in the Economic Times, the lead creditor for each plant <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/lenders-find-a-rescue-plan-for-stressed-power-assets/articleshow/64020848.cms">will invest ₹100 million</a> while the other creditors will invest an amount that is proportional to their exposure on each project. The fund will also include the contributions of pension funds, the National Investment and Infrastructure Fund (NIIF) and other strategic investors. Consequently, the debt in each project will receive a rating from an accredited agency. The healthy portion of the debt will be swapped for an equity holding, while the project promoter’s and creditors will be forced to take the unrecoverable portion at a significant discount to its real value. Furthermore, in order to retain their control over the assets, the plant’s owners could reportedly be asked to supplement their investment with fresh equity. The asset management company will own the assets for a period of up to five years. The banks will also bring a state-owned power firm like NTPC to operate these assets during the recovery period. Finally, the banks will sell the assets, once they reach a certain level of financial health, in order to recover their debts. The move is expected to result in the quicker resolution of these assets, and also provide the lenders with better valuations on their debt in comparison to an outright <keyword id="43550" type="EVENT" weightage="20" keywordseo="Bankruptcy">bankruptcy</keyword>. The plan to form an asset management company is motivated by survival. These creditors are already dealing with weak balance sheets and high provisioning requirements for bad loans. They can’t afford any significant increase in their non-performing loans. Short on time The plan is contingent on a number of regulatory and stakeholder approvals. The banks will reportedly finetune the scheme over the next three months and ensure that all power-purchase agreements for these assets are honoured. However, they will also have to contend with an order from India’s central bank in February 2018 that requires stressed assets to be resolved within 180 days of March 1st or submitted to the National Company Law Tribunal (NCLT), a bankruptcy court. As a result, the banks have until September to implement the scheme, which is when the resolution period on some of the plants expire. In order to prevent this from happening, the Ministry of Power has written to the central bank and the finance minister, Arun Jaitley, to stay the order from the RBI. The banks will likely try everything they can to prevent these assets from being referred to the NCLT. If this happens, they will be forced to take a large haircut in the ensuing liquidation process, plunging them further into a problem <a href="https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1009">of their own making.</a>

A stressed power sector is threatening India’s economy, but its banks have a solution

New Delhi, Mar 8 () Being steered by a government-appointed and eminent banker Uday Kotak-led board on its path to recovery, crisis-hit IL&amp;FS has sought extension of bid validity for five road projects that are faced with debts totalling over Rs 10,000 crore. Infrastructure Leasing and Financial Services (IL&amp;FS) had received time-bound binding bids for these five road projects, but the validity of those bids expired on February 29. These five projects are Chenani Nashri Tunnel project (CNTL), Pune Sholapur Road Development (PSRDCL), Jorbat Shillong Expressway Limited (JSEL), Hazaribagh Ranchi Expressway (HREL) and Jharkhand Infrastructure Implementation Company (JIICL). The five projects have received bids totalling Rs 7,489 crore, as against an aggregate debt of Rs 10,500 crore, as per an affidavit filed by the company before the National Company Law Appellate Tribunal (NCLAT). When contacted, an IL&amp;FS spokesperson told , "We are working with the bidders to get an extension of the bids and will follow the laid-out process for concluding the transaction on receipt of the extension." Out of the five projects, the company recently got approval from lenders for three projects -- PSRDCL, JSEL and CNTL -- for bids totalling approximately Rs 6,250 crore. However, an expired validity may pose challenges in sale of these assets in the absence of an extension, even if lenders have approved the bids. After a huge crisis came to light due to outstanding debt of over Rs 90,000 crore at IL&amp;FS, the government in October 2018 had seized control of the debt-trapped company and superseded its board by appointing a new one, led by Kotak as its chairman. The new board, as part of the overall resolution process for the IL&amp;FS Group, has sold a number of assets to clear dues and debt, while the process is underway for resolution of several other debt-laden projects. Out of the five road projects, Cube Highways has emerged as the highest bidder with Rs 3,900 crore bid for CNTL having debt of approximately Rs 5,454 crore, while Autostade of Italy is the top bidder for PSRDCL project with bid of Rs 1,404 crore as against total debt of Rs 1,925 crore. Sekura Roads has made the highest bid for JSEL project at Rs 916 crore, as against total debt of Rs 1,406 crore. According to the company's NCLAT affidavit, the binding bids received for these five road special purpose vehicles of IL&amp;FS Transport Services Ltd (ITNL), an IL&amp;FS subsidiary. have already been extended once. Post the earlier extension, the binding bids received for each of the ITNL SPVs were valid till February 29, 2020 and letters of intent were required to be issued to the respective highest bidders on or before that date. However, the company was unable to complete its process of seeking lenders' approval in time which has resulted in the bid validity expiring. While three projects now have lenders' approvals but lapsed bids, two projects --HREL and JIICL -- are also yet to get lenders' approval, which will be followed by approval from Justice D K Jain and the National Company Law Tribunal (NCLT) before letters of intent can be issued. Sekura Roads is the highest bidder for both these projects with bids valued at Rs 727 crore and Rs 512 crore for JIICL and HREL, respectively. In the meantime, global banking giant HSBC has filed a winding up petition in a Singapore court against an overseas subsidiary of ITNL for recovery of dues totalling more than Rs 1,000 crore. In the first such case against a group entity of IL&amp;FS, the Hongkong and Shanghai Banking Corporation (HSBC) is seeking to recover its funds parked in bonds worth RMB 1,000 million (over Rs 1,050 crore) maturing in 2021, which were issued by ITNL Offshore Pte Ltd. The plea, filed on February 27, has been listed for hearing on March 20 and "any creditor or contributory of the company desiring to support or oppose the making of an order on the winding up application may appear at the time of hearing by himself or his counsel for that purpose", as per a notice published in Singapore's government gazette on March 3. BJ MKJ

IL&FS seeks extension of bid validity for 5 road projects facing Rs 10,500-cr debt

Over 13 banks including the <a href="http://www.businessinsider.in/searchresult.cms?query=State+Bank+of+India">State Bank of India</a> approached the <a href="http://www.businessinsider.in/searchresult.cms?query=Supreme+Court">Supreme Court</a> on Tuesday to prevent <a href="http://www.businessinsider.in/searchresult.cms?query=Vijay+Mallya">Vijay Mallya</a>, once called India’s <a href="http://www.businessinsider.in/searchresult.cms?query=Richard+Branson">Richard Branson</a>, from fleeing the country. 
 
However, <a href="http://www.businessinsider.in/searchresult.cms?query=Vijay+Mallya">Mallya</a> seems to have left a few days ago. Oops, too little too late. Catch him if you can! 
 This is a day after the <keyword id="44647" type="ORGANIZATION" weightage="100" keywordseo="debt">Debt</keyword> Recovery Tribunal (DRT) restrained <a href="http://www.businessinsider.in/searchresult.cms?query=Vijay+Mallya">Mallya</a> from blowing the Rs. 515 Crores <a href="http://www.businessinsider.in/searchresult.cms?query=Diageo">Diageo</a> paid him. This was in the hope he’ll pay that money to the banks. The banks wanted DRT to freeze <a href="http://www.businessinsider.in/searchresult.cms?query=Vijay+Mallya">Mallya</a>'s passport and issuance an arrest warrant to hold him back. The banks didn’t want him to leave as they claim he still owns them over Rs. 9,000 Crores. 
 
This is after <a href="http://www.businessinsider.in/searchresult.cms?query=Vijay+Mallya">Mallya</a> recently said he wanted to settle in London. So where did he leave for? No one knows. <a href="http://www.businessinsider.in/searchresult.cms?query=Vijay+Mallya">Mallya</a>'s spokesperson claims she has no information about his whereabouts. He was apparently only communicating through e-mail. A man vanished, like fart in the wind. Cue gif! 
 
The petitioner banks approached the Karnataka High Court but didn’t get any interim order. They grudgingly say the HC failed to protect their interest. The list includes <a href="http://www.businessinsider.in/searchresult.cms?query=State+Bank+of+India">SBI</a>, Bank of Baroda, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India, Indian Overseas Bank, Punjab and Sind Bank, Axis Bank, Bank of Baroda, Corporation Bank, Federal Bank and IDBI Bank. 
 
Now they're trying to get him to return. #GharWapsi with a twist, eh? 
 
<a href="http://media.indiatimes.in/media/content/2015/Dec/mal1_1450344577.jpg">Image Source</a>

Vijay
Mallya - the escapee who didn't escape, apparently

Mining conglomerate <keyword id="19919721" type="General" weightage="20" keywordseo="Vedanta" source="keywords">Vedanta</keyword> Ltd on Tuesday reported 36.5 per cent rise in consolidated net profit at Rs 3,606 crore for June quarter FY25 due to improved margins and robust cost reduction across all operations. The company had posted a net profit of Rs 2,640 crore in the year-ago period. Income rose to Rs 36,698 crore over Rs 34,279 crore in the year-ago period, according to an exchange filing. Vedanta said in a statement that the proposed demerger of its businesses is on track and it has already filed the demerger scheme with NCLT after getting a nod from secured creditors. The company said that its board has approved a capex investment of USD 270 million for its oil and gas business. "The strategic priority for the Cairn Oil &amp; Gas business is to augment reserves and increase near term volume through infill wells and enhanced oil recovery. In order to deliver this, the Board has approved capex investment (net) of USD 270 million across fields in the Rajasthan block for drilling wells and construction of surface facility for ASP ( Alkaline Surfactant Polymer) injection," the company said in a separate filing. Vedanta Executive Director Arun Misra said that the company has delivered a strong start to the year, with exceptional EBITDA improvement of 47 per cent and PAT improvement by 54 per cent year-over-year on the back of improved margins, and robust cost reduction across all operations. "Our aluminium and zinc divisions continue to outperform industry benchmarks, consistently ranking in the top quartiles and deciles of the global cost curve. These achievements are a direct result of our strategic focus on cost, as reflected in a 20 per cent year-over-year reduction in overall cost," he said. The company's growth projects are well on track and it remains committed to commission the majority of these projects in FY25. "Moving ahead, our focus on operational efficiency, sustained expansion, and ESG excellence will guide our journey. With this dedication, we are confident in our ability to create substantial shareholder value in the year ahead," he added. Last month, the mining conglomerate raised Rs 8,500 crore (over USD 1 billion) through Qualified Institutions Placement (QIP) of 19.31 crore equity shares at an issue price of Rs 440 per share. Company's CFO Ajay Goel said, "The overwhelming response to the Vedanta's... QIP...underscores investors' huge confidence. The proceeds from the QIP will be further instrumental in deleveraging the balance sheet and reduction of finance costs. We have received all the requisite approvals and have filed the demerger scheme with the National Company Law Tribunal (NCLT) taking our demerger a step closer to reality." The company's gross debt stood at Rs 78,016 crore as on June 30, 2024. Vedanta Ltd, a subsidiary of Vedanta Resources Ltd, is one of the world's leading natural resources companies spanning across India, South Africa, Namibia, Liberia, the UAE, Korea, Taiwan and Japan with significant operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, nickel, aluminium, power and glass substrate. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank">Unicommerce eSolutions IPO – Price band to risk factors, all you need to know</a> <a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank">Electric two-wheeler sales cross the 1 lakh mark after four months, Ola Electric leads the market</a> <a href="https://www.businessinsider.in/sports/news/neeraj-chopras-paris-olympics-journey-to-begin-with-qualification-round-today-top-rivals-to-look-out-for/articleshow/112311760.cms">Neeraj Chopra qualifies for finals with a first throw of 89.34m – top rivals to look out for</a>

Vedanta Q1 profit surges 37% to ₹3,606 crore on improved margins

Scheduled commercial banks have written off loans amounting to Rs 10,09,511 crore in the last five financial years and the process of recovery of dues from the borrowers continues, <keyword id="309842" type="General" weightage="50" keywordseo="union-finance" source="Orion">Union Finance</keyword> Minister <keyword id="129243" type="General" weightage="50" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> informed the <keyword id="6355187" type="General" weightage="50" keywordseo="lok-sabha" source="Orion">Lok Sabha</keyword> on Monday. <keyword id="679937" type="General" weightage="100" keywordseo="sitharaman" source="Orion">Sitharaman</keyword> said recovery in NPA (non-performing asset) accounts, including written-off loans, was an ongoing process. According to <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>) data, public sector banks have recovered Rs 4,80,111 crore, including Rs 1,03,045 crore from written-off loans, during the last five financial years, she said. "As per inputs received from the RBI, scheduled commercial banks have written off an amount of Rs 10,09,511 crore during the last five financial years," Sitharaman said during Question Hour. The borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, she added. Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available, Sitharaman added. The actions include filing a suit in civil courts or in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement and compromise and sale of NPAs. "Therefore, write-off does not benefit the borrowers," she said. The minister said according to RBI guidelines and policy approved by banks' boards, NPAs, including those in respect of which full provisioning had been made on completion of four years, were removed from the balance sheet of the bank concerned by way of the write-off. Banks evaluate and consider the impact of write-offs as part of their regular exercise to clean up their balance sheet, avail of tax benefits and optimise capital, in accordance with RBI guidelines and policies approved by their boards, she said. Replying to a question, Sitharaman said the process of retrieving money of small depositors and investors from loan defaulters was very complicated as the legal process was lengthy and there were multiple claimants to the seized assets that included banks and other financial institutions. The minister said she was aware of the depositors undergoing extreme difficulties and there was a need to look into the issue and how to simplify the process. Earlier, Minister of State for Finance Bhagwat <keyword id="12139871" type="General" weightage="50" keywordseo="kishanrao-karad" source="Orion">Kishanrao Karad</keyword> said the names of loan defaulters were not disclosed due to RBI guidelines but their names could be disclosed once their assets were put up for auction. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/ipos-pick-up-steam-in-last-three-months-of-2022-strong-pipeline-likely-to-propel-listings-in-2023/articleshow/96325621.cms">IPOs pick up steam in last three months of 2022 – Strong pipeline likely to propel listings in 2023</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/idfc-first-bank-announces-zero-free-banking-on-savings-accounts/articleshow/96334786.cms">IDFC First Bank announces zero-free banking on savings accounts</a>

You Searched For "karnataka debt recovery tribunal" and got 13 results

NCLAT judge recuses from hearing Raveendran's plea against insolvency proceedings of Byju

PTI

UK court allows Indian banks to collect claims worth $1.55 billion from tycoon Vijay Mallya

Dilsher Dhillon

This is how you can declare yourself bankrupt in India if you can’t repay loan

BI India Bureau

Recovery through insolvency process better compared to other options: IBBI chief

PTI

Indian banks are recovering over 1.5 times as much money under the bankruptcy code — but it's still painfully slow

BI India Bureau

SEBI wants to tag defaulters as "difficult to recover" where recovery is virtually impossible

PTI

Here's how the government’s new debt relief scheme for small business owners will work

BI India Bureau

BASF India gets Rs 46 cr tax notice from Karnataka govt

PTI

A stressed power sector is threatening India’s economy, but its banks have a solution

Dilsher Dhillon

IL&FS seeks extension of bid validity for 5 road projects facing Rs 10,500-cr debt

PTI

Vijay Mallya - the escapee who didn't escape, apparently

Saikat Pyne

Vedanta Q1 profit surges 37% to ₹3,606 crore on improved margins

PTI

Loans worth ₹10,09,511 crores written off in last five financial years: Sitharaman

PTI

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