In­sol­vency Board Reg­is­ters Six Cases

ICICI’s ap­pli­ca­tion for res­o­lu­tion against In­noven­tive was the first to be reg­is­tered

The Economic Times - - Finance & Commodities - At­madip.Ray@ times­group.com

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.

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