Bidders may face jail term, Rs 1 crore penalty if they pull out of insolvency process
PrintListen to this Article
The publication mentioned that apart from invoking section 74 of the Insolvency and Bankruptcy Code (IBC), which provides for a jail term, the Centre may slap a maximum Rs 1 crore penalty on entities like Liberty House and Adani Wilmer which have backed out from their earlier commitments to take over stressed assets.
Earlier this week reports surfaced that Adani Wilmar pulled out of a deal to buy bankruptcy-bound Ruchi Soya after the committee of creditors backed it. Besides, Liberty House withdrew from the resolution process of Adhunik Metaliks and Amtek Auto, citing multiple issues.
In August, Adani Wilmar — a joint venture between infrastructure conglomerate Adani Group and Singapore’s Wilmar International — was declared as the highest bidder to acquire Ruchi Soya. It wrote to resolution professional and the creditors mentioning that it is withdrawing its Rs 5,474-crore offer for the debt-laden edible oil company as the delays in closing the process are leading to “asset deterioration” and is “detrimental to the interest of the stakeholders”.
The daily quoting unidentified sources as saying that many crucial resolution plans have been badly affected because UK-based Liberty House failed to honour its commitment for two insolvent companies — Amtek Auto and Adhunik Metaliks.
Last week, Liberty House’s Sanjeev Gupta, in an interview to a television channel, mentioned that he was eager to see the Adhunik Metaliks deal to materialise, emphasising that Liberty House was interested in a clean asset with no claims. The TV channel quoted him to say that he had concerns over resolution process of Amtek Auto, including the valuation report.
The report also stated that the Centre is interested in resolving anomalies in the IBC implementation procedure and is seeking to expedite cases to ensure that the maximum permissible time limit is maintained. #casansaar (Source - Times of India)
Category : Insolvent Professional | Comments : 0 | Hits : 710
The National Company Law Tribunal (NCLT) on Monday ordered insolvency proceedings against media baron Subhash Chandra on a plea filed by Indiabulls Housing Finance. A two-member Delhi bench of the NCLT directed initiation of personal insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL) Chairman Emeritus Chandra, who was a guarantor for a loan given to Essel group firm Vivek Infracon Ltd. The NCLT bench, consisting members Ashok K Bhardwaj and Subrata K Das,...
The Insolvency and Bankruptcy Board of India (IBBI) invites suggestions/comments from public and regulated entities, on the Regulations for simplifying, easing and reducing cost of compliance. The suggestions are invited in pursuance of the announcement made in the Union Budget for FY 2023-24 by the Union Finance Minister: “To simplify, ease and reduce cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For th...
To make surety bond business more attractive, the government is looking at making relevant changes in the Insolvency and Bankruptcy Code (IBC) to consider insurers as financial creditor in case of default of infra projects. The surety bond issued by a general insurance company is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee). The surety is a company that provides the fina...
The National Company Law Tribunal Delhi recently observed that the Insolvency and Bankruptcy Code cannot be used as a recovery tool. “We are of the view that in the present case the applicants are already having demands drafts of amount exceeding the defaulted amount in this petition and moreover IBC cannot be used as a tool for recovery; the settlement has been arrived between the parties. The amount has been paid in excess of the default amount and Ld. Counsel for the applicant has al...
India’s turbulent aviation sector will likely see another player go belly up with Go First of the Wadias filing for voluntary insolvency before the National Company Law Tribunal (NCLT). The budget carrier said it is cancelling all flights on May 3, 4, and 5 and will refund the full fares to the passengers. The Directorate General of Civil Aviation (DGCA) has questioned the cancellation and issued a show-cause to the airline. Go First has been asked to submit its response within 24 ho...
Comments