Corporate Snippets on May 1, 2020
Ø Moody's slashes India growth forecast to 0.2%t for 2020
Ø US supports firms weighing India as alternative to China
Ø Unemployment rate improves to 21.1% from last week
Ø MFIs turn vulnerable to default, seek relief package
Ø Govt. extends deadline to bid for AI till June 30
Ø Blockchain can tackle supply chain failures: WEF
Ø SEBI initiates measures to study market issues
Ø Hong Kong may come under new FDI rules; custodians to seek clarity
Ø Diamantaires stare at decade-low revenue as Covid epicentre shifts to US
Ø ADB approves $1.5 billion loan for India to fight coronavirus pandemic
Ø BSE enables negative price trading in crude oil, testing on Monday
Ø Nokia, Airtel sign deal worth Rs 7,500 cr for 4G network enhancement
Ø RIL doubles down on its debt reduction plan with proposed rights issue
Ø Domestic leather sector flattened as $1-b export orders stand cancelled
Ø TRAI recommends overhaul in governance structure of BARC India
Ø Centre mulls extending interest subsidy scheme for exporters
Ø Covid-19 trains global focus on ‘force majeure’ clause
Ø Axis Bank reports loss of ₹1,388 crore in Q4 due to higher provisions
Ø Grandfathering of existing unlisted NCDs applicable across MF industry: SEBI
Ø Mumbai court rejects interim bail plea of DHFL promoters
Ø Axis Bank to raise its stake in Max Life Insurance to 30%
Ø IDFC First Bank plans to raise up to ₹2,000 crore
Ø Biocon, Mylan launch biosimilar Fulphila in Canada
Ø Singapore to enter into recession this year due to coronavirus pandemic
Ø Big manufacturing opportunity for India in electronics, if states move swiftly
Ø Investors pull out Rs 5,000 crore from credit risk funds after Templeton move
Ø India ties up with BRICS partners to protect MSMEs
Ø US proposes new restrictions on exports to China
Ø Reliance Industries to consider first rights issue in three decades
Ø HSBC’s pre-tax profit falls 48% amid coronavirus
Ø US auto factories likely to remain closed for another two weeks
Ø US economy shrank at 4.8% rate last quarter
Ø IT firms TCS, Infosys, Wipro to reduce subcontractors
Ø Rs 111 L-cr required as infra funding during 2020-25
Ø Farming sector will not be impacted by Covid-19: Govt
Ø Sell unsold units at 'no-profit-no-loss' to save interest, boost liquidity: Gadkari to realty cos
Ø Manulife picks 49% stake in Mahindra AMC
Ø Nearly half of world's workforce risks losing livelihoods in pandemic: ILO
Ø MF redemptions in dent segment continue despite RBI's liquidity window
Ø Strides Pharma begins export of antiviral drug to treat Covid-19
Ø Top court orders Income Tax refund of Rs 733 crore to Vodafone Idea
Ø Reliance increases stake in US-based tech company SkyTran to 26.3%
Ø Hospitality sector stares at $6-14-b losses in FY21
Ø Jet Airways’ RP asks SpiceJet to pay up for leased engines
Ø Shapoorji Pallonji to sell infra assets to reduce debt
Ø Glaxo plans sale of $3.7 billion stake in Hindustan Unilever
Ø Lupin gets USFDA nod for generic inhalation solution
Ø MCX to levy 100% margin on crude oil
Ø SARVA raises fresh funds from Mantra Capital to expand digital footprint
Ø India's domestic air passenger traffic fell by 11.8% in March: IATA
Ø Credit risk funds lose 17% of their AUM in three days
Ø GST revenue for April, May set to fall drastically
Ø Oil posts double-digit gains after US crude storage build slows
Ø ADB gives $ 346 million loan for power sector in rural Maharashtra
Ø Power demand to fall by 1% in FY21: Icra
Ø Textile players to witness substantial fall in topline, operating profits: Ind-Ra
Ø RBI extends curbs on Mumbai-based Co-operative bank for 6 months
Ø SEBI eases compliance norms for mutual funds on unlisted debt
Ø Daimler sees operating loss as auto sales drop due to coronavirus
Ø Nirav Modi remanded to custody, extradition trial from May 11 in UK court
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👉🏻CS exams at all levels slated from June 1 to 10 postponed
(In view of Covid-19 pandemic and subsequent lockdown, ICSI decided to postpone CS examinations for the June 2020 session at all levels)
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https://bit.ly/3aS3UU0
👉🏻CBIC notifies effective date for Rule 87(13) and Form GST PMT09
(CBIC notifies 21st day of April, 2020 asthe date from which Rule 87(13) of CGST Rules & Form GST PMT-09 will comes into effect.)
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https://bit.ly/2YtojfP
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👉 In a major relief for ongoing liquidation processes under IBC, the Insolvency and Bankruptcy Board of India (IBBI) has excluded the liquidation timeframe for bankrupt companies from the lockdown period.
A Gazette notification, announced the inclusion of a regulation to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 to effect the same.
As per the new regulation ’47A’ to deal with exclusion of period of lockdown, “Subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purposes of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any liquidation process.”
The notification said that since the amended regulations provide clarity to the stakeholders in regard to the model time-line in the completion of various tasks in the liquidation process, no person is being adversely affected by giving retrospective effect.
Further, the board has also excluded the lockdown period from the resolution timeframe of corporate persons.
IBBI said that a new regulation ’40 C’ would be inserted in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, after regulation 40B.
The special provision relating to timeline says: “Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process.” (IANS)
👉 The legislative intent of the bankruptcy framework of India, which is codified in the Insolvency and Bankruptcy Code, 2016 ("Code"), is resolution and revival of the financially distressed entities, which have defaulted in their payment obligations, so as to benefit not only such entities but also their stakeholders (including employees and workmen) in equal measure.
In order to achieve this objective, the Code has envisaged constitution of Committee of Creditors ("CoC") consisting of financial creditors, and entrusts such CoC with the task of identifying the most feasible and viable plan to revive the business of such distressed entities. The Resolution Professional has been assigned the duty of managing the entire Corporate Insolvency Resolution Process ("CIRP"), assisting the CoC in selecting the most suitable resolution applicants and scrutinizing resolution plans which are submitted by such selected resolution applicants.
Once a resolution plan has been approved by members of the CoC, the minority dissenting financial creditors cannot question the logic or the justness of the opinion expressed by the majority of the financial creditors. The financial creditors are obligated to apply commercial wisdom while reaching to such an opinion. Where a resolution plan fails to garner the requisite voting support of 66%, the decision of the dissenting financial creditors would prevail and the tribunals would be left with no option but to order liquidation of such corporate debtor.
The Insolvency and Bankruptcy Code (Amendment) Act, 2019 ("2019 Amendment Act"), in addition to reaffirming the primacy of the financial creditors over commercial decisions amended section 30(2) of the Code in order to protect the interest of dissenting financial creditors by stipulating the requirement of certain minimum payment to the dissenting financial creditors (in the event the resolution plan has been approved by the requisite majority of financial creditors).
Prior to 5 October 2018, Regulation 38(1)(c) of the CIRP Regulations made it mandatory for a resolution applicant to provide for payment of liquidation value to dissenting financial creditors. However, the National Company Law Appellate Tribunal ("NCLAT") held that due to the absence of any specific provision in the Code, there could be no discrimination amongst the financial creditors as far as the distribution of resolution funds were concerned and that the said Regulation 38(1)(c) of the CIRP Regulations was inconsistent with the provisions of the Code[2]. Subsequent to this, the CIRP Regulations were amended to do away with the mandatory requirement of payment of liquidation value to the dissenting financial creditors.
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