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Why a simplified tax regime is the need of the hour

Tax rules must be clear-cut if the government wants to lower tax arrears.
The Economic Times

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INSOLVENCY & BANKRUPTCY CODE

Resolutions via IBC see a big fall in third quarter

Data from the Insolvency and Bankruptcy Board of India (IBBI) showed that financial creditors realised just 12% of their claims in the quarter-ended December, down from 34% in the quarter-ended September. Bankers said falling recoveries from the IBC and delays in resolution have pushed them to seek solutions out of the courts.

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Lenders set to recover 43.1% from insolvency proceedings

Successful resolutions under IBC will result in recoveries of Rs 1.52 lakh cr for ba...

  • This is the first deal by the global private equity giant under India’s Insolvency and Bankruptcy Code (IBC) to infuse foreign capital. As a part of its resolution plan, Blackstone Group under its resolution plan has agreed to pump in Rs 384 crore up front to clear the dues of the workmen and creditors, apart from committing infusion of Rs 180 crore towards capital expenditure.

    In December 2019, the government had passed an ordinance to amend the code, with the result that a threshold of minimum 100 homebuyers or 10% of total homebuyers in a project, whichever is less, is required to take the builder to an insolvency court.

    "The government has instituted comprehensive reforms in PSBs to improve, governance, underwriting, monitoring and recovery, and has leveraged technology in all aspects of banking, resulting in reduction in their NPAs," Sitharaman said in written reply to a question in the Lok Sabha.

    This is the first case of overseas incorporated arms being brought under the ambit of local insolvency laws.

    The bank had filed the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, which sought the resolution process claiming total dues worth Rs 80.73 crore.

    Punj Lloyd initially attracted interest from as many as 13 prospective bidders, according to people in the know. These included an arm of the Vedanta group and Welspun. None of them proceeded in making a formal financial bid for the company after carrying out due diligence.

    Earlier, on August 20 last year, the Delhi-based principal bench of the National Company Law Tribunal (NCLT) had directed to initiate insolvency proceedings against the company over the plea filed by one of its flat buyers citing delay in the project and appointed an interim resolution professional.

    Bringing entities on the basis of inter-connectedness or common assets into the group resolution framework may face challenges and lead banks to classify standard accounts as NPAs, dragging standard cases into insolvency because of non-recovery of dues after insolvency resolution.

    "The writ petition has been filed by 11 petitioners of 11 projects being constructed by Pioneer Urban Land & Infrastructure, Emaar MGF Land, BPTP, Supertech, Ansals, among others," said advocate Aditya Parolia of PSP Legal, representing the buyers.

    The Confederation of Indian Industry has submitted a 12-point plan to Prime Minister Narendra Modi and finance minister Nirmala Sitharaman, which includes introduction of a one-time settlement scheme and compounding provision.

    "This is for the extension of the CIRP process as it ends on 4th of February. Public notices are being given for the submission of bids on 31st of Jan and we see a lot of it coming in, so we request the CIRP process be extended further," said the counsel representing Videocon Industries. Videocon Group had sought EoIs for its 13 group companies.

    The Insolvency and Bankruptcy Code (IBC), which came into force in 2016, provides for market-linked and time-bound resolution of stressed assets. The survey, tabled in the Parliament on Friday, also said resolution under the Code has been much higher as compared to other processes.

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