19th May 2K20
Ø Stimulus dent to fiscal deficit at 1-2% of GDP: Experts
Ø Govt to bring Ordinance to amend companies law
Ø 'PFRDA proposes composite social security scheme'
Ø Maruti to resume operations at Gurugram plant
Ø E-commerce firms may finally resume full operations
Ø China warns US of 'all necessary measures' over Huawei
Ø 'BoE looking more urgently at negative rates'
Ø Govt allows Indian public companies to directly list shares overseas
Ø General Atlantic picks 1.34% stake in Jio platforms for Rs 6,598.38 cr
Ø Higher borrowing can see FY21 combined fiscal deficit hit 12%: Economists
Ø Fiscal stimulus 2.0: States allowed to borrow more, but with conditions
Ø Reserve Bank makes $21-billion cut to US treasury holdings in March
Ø FinMin notifies retrospective amendment in CGST Law
Ø Experts counsel caution in airport privatisaton
Ø Government to privatise non-strategic PSUs: FM
Ø Gem and jewellery exports dip to three-year low in FY'20
Ø Sterling and Wilson Solar bags EPC contract in Australia for Rs 2600 crore
Ø Indian economy may contract by 45% in June quarter: Goldman Sachs
Ø India Inc urges further easing of curbs amid lockdown extension
Ø Lower input costs aid margins even as revenue falters, Q4 early trends show
Ø Travel and tourism industry in shock with no relief measures from govt
Ø Coronavirus pulls down CII-IBA Financial Conditions Index to below 50
Ø FM Sitharaman paves way for PSU mergers, privatisation; opens all sector opportunities for private cos
Ø FM Sitharaman: No insolvency cases against MSMEs for 1 year; Covid-related debt excluded from defaults
Ø India to export non-medical, non-surgical masks worth USD 1 billion in next 3 months
Ø FM Nirmala's fifth tranche covers MNREGA to health, education and more
Ø Energy dispute deepens between Mexico and foreign allies
Ø Nabard disburses Rs 20,500 crore to coop banks, RRBs
Ø Tata terminates joint venture with PepsiCo
Ø Centre, states' deficit to be at 12% of GDP: DBS
Ø Vedanta's board approves delisting proposal
Ø L&T Shipbuilding amalgamated with Larsen & Toubro
Ø Govt. may monetise debt if fiscal overshoots: Official
Ø Govt. notifies cut in EPF contribution for 3 months
Ø New-look inter-creditor agreement on the cards as IBC process suspended
Ø RIL says core business has got 'demand-side shock' due to coronavirus
Ø ICAI issues norms for auditors to assess going concern, key audit matters
Ø Torrent Power posts loss before tax of Rs 693 crore in Q4 of FY'20
Ø Govt. withdraws order on compulsory wage payment by firms during lockdown
Ø RBI converts less than third of Rs 30,000 cr bonds into long-term paper
Ø Japan concerned over fate of its companies in India
Ø Bharti Airtel reports Q4 net loss of Rs 5,237 crore
Ø Full economic recovery is unlikely in 2021, warns IMF chief
Ø Tata Consumer Products to buy PepsiCo’s stake in NourishCo Beverages
Ø ZF, Belgrave Investment, Odisha mining baron pick up stakes in Suzlon
Ø India Oil Corporation nears first deal to export fuel to Bangladesh: Sources
Ø Cash-strapped India's economic plan unlikely to soften coronavirus blow
Ø Tata Motors offers easy financing option, special benefits for Covid-19 warriors
Ø TidalScale announces reseller agreement with Infosys
Ø Insolvency suspension to bite banks as stressed asset resolution seems distant
Ø SoftBank’s first Vision Fund may be its last after $18 billion loss
Ø Cipla eyes multi-drug portfolio for virus cure
Ø Outlay for rural jobs scheme raised 65% to Rs 1,01,500 crore
Ø Govt. notifies GST law changes, lack of clarity on transitional claims
Ø Now listing on BSE SME to cost less for small businesses as exchange looks to attract more firms
Ø Coal India under financial stress as power sector dues mount
Ø RBI may extend moratorium on repayment of loans for three more months, says report
Ø Japan slips into recession, worst yet to come as pandemic wreaks havoc
Ø Indian government will soon take decision on OCI visa issue: Minister
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👉 In a big relief to cash-starved firms, the government on Sunday said insolvency proceedings against fresh defaulters would remain suspended for up to one year and Covid-19-related debt would be excluded from the definition of default. The breather, however, will potentially hit financial and operational creditors hard and bleed their balance sheet, apart from temporarily depriving them of a credible mode of bad debt resolution. Lenders may be forced to seek regulatory forbearance on provisioning and capital requirements.
Initially, proceedings under the Insolvency and Bankruptcy Code (IBC) can’t be invoked for six months, which can then be extended by another six months, depending on the pandemic situation. There will be a special insolvency framework under section 240-A of the IBC. Already, in a bid to insulate small businesses from being dragged to the NCLT, the default threshold for triggering insolvency has recently been raised to Rs 1 crore from just Rs 1 lakh earlier.
Finance minister Nirmala Sitharaman said an ordinance will be promulgated soon to implement the proposed changes. However, proceedings in the cases already admitted will remain unaffected by the latest move. Data available with the IBBI show, proceedings in 1,961 cases were going on as of December 2019.
Despite risks of a sharp deterioration in credit quality of banks and cash flows of operational creditors due to the suspension of IBC initiation, many experts believe that given the unprecedented crisis, the existence of companies must take precedence over the resolution of stressed assets.
The suspension on fresh initiation of insolvency proceedings for one year is likely to increase provisioning for banks. “The advantage we were getting to refer a case to the National Company Law Tribunal (NCLT) was reversal of additional provisioning, now that option will not be there,” an MD & CEO of a bank who did not wish to be named told FE. According to the June 7, 2019, circular of the Reserve Bank of India (RBI), banks can reverse 20% provisioning for unresolved cases, after referring a case to the NCLT.
👉 Group Insolvency is a process in which claims against debtors of the same group are consolidated in a single resolution application to adjudicate upon by the Adjudicating Authorities ("hereinafter referred as AA"). It was difficult for the AAs across the country to adjudicate upon such resolution requests by the creditors due to the lack of provisions in Insolvency and Bankruptcy Code ("hereinafter referred as IBC"). The Companies Act 2013 itself provides for separate legal entity and preparation of consolidated financial statements of associate and subsidiary companies in the same form. The rule of 'separate legal entity' requires modifications owing to the increase in formation of Corporate Groups in Indian markets. The author in this article analyses the concept of Group Insolvency in brief in the light of judgments and the recommendations put forth by the Working Group formed by the Insolvency Bankruptcy Board of India.
United States Bankruptcy Laws, Bankruptcy Courts have consolidated proceedings along with assets and liabilities of the Debtors on the basis of criteria for substantive consolidation viz.
The degree of difficulty in segregating and ascertaining individual assets and liabilities;
presence or absence of consolidated financial statements;
the profitability of consolidation at a single physical location;
the commingling of assets and business functions;
the unity of interests and ownership between the various corporate entities;
The existence of parent and inter corporate guarantees on loans; and g. the transfer of assets of without formal observance of corporate formalities.
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👉🏻Govt allows Indian public companies to directly list shares overseas
(Govt announced allowing Indian public companies to directly list their shares overseas. Also, Pvt companies that list their debentures on stock exchanges will now not be regarded as listed firms)
👇🏻 👇🏻 👇🏻
https://bit.ly/2zHM613
👉🏻Sources and approach for self study of International Taxation
(Sources and approach for self study of International Taxation discussed by CA. Gaurav Singhal)
👇🏻 👇🏻 👇🏻
https://bit.ly/2LzIgK4
👉🏻Collateral Free Automatic Loans for MSMEs
(Collateral Free Automatic Loans for MSMEs announced by Finance Minister discussed by CA. Satuti Mahajan)
👇🏻 👇🏻 👇🏻
https://bit.ly/3dZAR2H
*👉🏻Webinar on Professional Opportunities in Strategising for Survival of MSME*
(CA Sansaar is going to organise Webinar on Professional Opportunities in Strategising for Survival of MSME on *19th May*, 2020 from *04:30 PM* onwards by *CA. Mayur Chokshi* from Mumbai)
👇🏻 👇🏻 👇🏻
https://bit.ly/3g37rD0
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👉 The Hon'ble Prime Minister of India on April 14, 2020 announced the extension of the lockdown till May 03, 2020 in view of containing the COVID 19 infection. Pursuant to the extension, the functioning of the courts have been further suspended. In view of the extension of the nationwide lockdown, the National Company Law Tribunal (hereinafter referred to as 'NCLT') has decided to maintain the status quo as it has decided to continue hearing only unavoidable urgent matters1.
The NCLT had issued a notice on March 22, 2020 whereby it had suspended its judicial work and notified that it would hear only unavoidable urgent matters. Through its notice dated April 14, 2020, the NCLT has now extended the applicability of the earlier notice till May 03, 2020 and has reinstated the points of consideration of the earlier notice.
The notice dated March 22, 2020 had instructed adherence to the following:
All NCLT benches shall remain closed from March 23, 2020 to March 31, 2020 for the purpose of judicial work, and only unavoidable urgent matters shall be heard on application by the aggrieved, through email to the registry NCLT Chennai after service of notice to the other side.
Parties/counsels were abstained from making oral submissions. The NCLT further discouraged persons arriving to NCLT Chennai. The verification had to be carried out through an affidavit.
As regard to the IBC-2016 matters, extension of time, approval of resolution plan and liquidation will not be construed as urgent matters. These matters will be taken up as soon as regular benches start functioning, until such time such application not to be filed.
The notice dated April 14, 2020 further added on the functioning of NCLT during Lockdown. It stated that the President, in addition to the earlier notices, will take further steps depending upon the exigencies of the litigant public and the same will be announced as and when any further decision is taken.
The above notification has arrived on time and has avoided any unforeseen situation or confusion that might have potentially arisen due to non-issuance of the notice. It has further reiterated upon the clarity for urgent matter and their qualification, removing all concerns in this regard whatsoever.
👉 New Delhi, May 18 (IANS) The Delhi Gymkhana Club has told the National Company Law Tribunal (NCLT) it has been facing harassment after it resisted pressure to give membership to a former high ranking member of the Ministry of Corporate Affairs (MCA).
The NCLT on April 24, issued notices to Delhi Gymkhana Club and its general committee (GC) managing its affairs, on a petition by MCA seeking management control of the facility. In its reply before the NCLT, through advocate Gaurav Liberhan, the club said "Insofar as the complaint of Navrang Saini is concerned, it arises out of the Club having resisted pressure to give him membership. The club verily believes that since Saini was a high-ranking member in the MCA, the harassment that the club has been facing from the Department of Corporate Affairs harps back to that episode."
Saini served as a member of the Indian Corporate Law Service (ICLS). He has served the Ministry of Corporate Affairs in various capacities. His last assignment was Director General, Ministry of Corporate Affairs. Saini is currently a Whole Time Member, Insolvency and Bankruptcy Board of India.
The club said that Saini along with other applicants named in the petition had paid the initial principal amount of Rs 10,000. "Their grievance is limited towards the revision of registration fee and not the imposition or the power to impose a registration fee. Needless to say these are facile arguments raised by disgruntled applicants," the club argued in its plea.
The Centre, through an urgent petition moved by MCA, had alleged "fraudulent and rampant mismanagement" by the general committee of the club, besides others, and sought to take over the management control under section 241 and 242 of the Companies Act, 2003. The club has refuted MCA''s allegations that the club''s affairs are being mismanaged by the former''s general committee.
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