Insolvency Board Registers Six Cases
ICICI’s application for resolution against Innoventive was the first to be registered
VINODKOTHARI Insolvency professional, Sree Metaliks International investors are looking at the implementation of this legislation with optimism
Kolkata: The way India deals with sick business is in for a shakeout. While Innoventive Industries moved the Bombay HC against the bankruptcy law, the Insolvency & Bankruptcy Board of India registered six other cases, one from liquor baron Vijay Mallya’s UB Engineering.
ICICI Bank’s application for insolvency resolution against Innoventive was the first to be registered by the Board. Among other cases are Srei Equipment Finance’s application against Sree Metaliks, insolvency filing by Nicco Corporation and Bhupen Electronics Ltd. The National Corporate Law Tribunal asked lenders to submit proof of their claims against these sick units and defaulters to interim insolvency resolution professionals. The law allows banks to liquidate assets of a company whose debts are not recast within 180 days once the insolvency resolution process begins.
“This effectively puts the company on a ventilator with a defined quantity of oxygen. Within 180 days, either the creditors resolve to put company back to life, or the company is sent to the death bed,” said Vinod Kothari, the insolvency professional for Sree Metaliks.
The process of insolvency resolution has also begun against Synergies-Dooray Automotive Ltd, which used to supply automobile components to Ford, and Rave Scans Pvt Ltd. “This is just the beginning. We have to see one or two cases reaching the liquidation stage or resolution stage. International investors are looking at the implementation of this legislation with great optimism,” Kothari said.
More banks are expected to file such cases as they are saddled with nearly .₹ 7 lakh crore of nonperforming assets and will be looking to recover dues by way of NPA resolution.