The Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP) work on the principle of indentifying the stress in a borrower entity and cure it at its nascent stage itself. The intent is to preserve the “economic value” of the underlying assets against the loan extended by financial creditor.
The Reserve Bank of India (RBI) on 28th April, 2017[1] proposed draft of Foreign Exchange Management (Cross border Merger) Regulations, 2017 under Foreign Exchange Management Act, 1999 in relation to cross border mergers and is accepting public comments till 9th May, 2017. These regulations cover merger, demerger, amalgamation or arrangements between Indian company (ies) and foreign company (ies).
By Vijaylakshmi Agarwal & Kanishka Jain, (finserv@vinodkothari.com)
Presently, the accounting treatment for securitization transaction is unclear and ambiguous despite a clear convergence with IFRS. The accounting principle for securitization was contained in AS 30 (based on IAS 39). The ICAI had originally promulgated AS 30 (based on IAS 39) in the year 2009, but was kept in abeyance, and subsequently repealed[1], while IND AS 109 is applicable from the year 2018. Therefore currently, there is no standard as such dealing with securitization for such companies on which IFRS is not applicable. Therefore for the interim period i.e. from 2015 to 2018, there are no standards governing the accounting for securitization in existence. Read more →
With the taxation issues resolved in the Budget 2016, and foreign portfolio investors allowed to invest in asset backed securities, Indian securitisation market is poised for a big leap forward. The indicative data available for the financial year 2016-17 mark a sharp 60% increase in the volume of pass-through securities (PTCs), signaling the much sharper growth to come.
The much-awaited ordinance, expected to make a tangible impact on India’s crisis of piling non-performing loans, was signed into a law by the President on 5th May 2017. The Ordinance, consisting of barely two sections, makes amendments to the regulatory framework of banking in India, viz., the Banking Regulation Act. After reading the law, one is forced to think – if this is what was holding up the resolution of NPA crisis in the country, did it actually have to take all this time?
Team financial services division, (finserv@vinodkothari.com)
What is a bitcoin?
A bitcoin is a virtual currency first introduced in the year 2008 by an untraceable group called Satoshi Nakamoto. It’s an open source peer-to-peer crypto-graphical system (direct connections without an intermediary) where transactions happen through a public ledger called blockchain, handling users’ data anonymously. The term is a combination of bit and coin where bit is the basic unit of computing and coin represents currency, combining to mean virtual currency.
Eight years since its introduction, bitcoin has gone through a lot. From receiving little support in the beginning in our country to now being the most widely used and accepted digital currency, we analyze its legal nature, its implications, and possible future scenarios.
Bitcoin is a refreshing concept in the traditional world of economy, bringing in a lot of debates, discussions and differences of opinions. For any issue to be handled legally, it becomes a prerequisite to first define it, see where it fits and then start working on it.
Defining bitcoin is tricky, especially in India where the legal and regulatory set up is rather a lot complex. Further, given no clarity as to its regulation yet, it becomes a more composite task.
Given its meaning and all the attributes it holds, bitcoin could be considered to be goods, currency, an instrument, consideration, money, value for money, property, etc.
Can an Application for resolution process of a company be filed under IBC, 2016 in case a winding up Petition is pending before a High Court?
MCA Notification on transition for pending proceedings
MCA notification for Companies (Transfer of Pending Proceedings) Rules, 2016[1] only provides for the transition of the litigation process from High Court to the NCLT. This Rule lays down the criteria for deciding whether the matter will be filed with and adjudged by NCLT or by High Court.
As per the Rule 5 of the said Rules, where the Petition for winding up has been served on the Respondent Company and is pending before the respective High Court, such Petition shall be adjudged by the High Court.
When a matter is being adjudged by the High Court under Act, 1956, the same will be governed by the provisions of the erstwhile Act, 1956.
MCA vide its notification dated 28th February, 2017 had tried to simplify the modus operandi for transferring shares to the IEPF Authority. In doing so, it had left various questions unanswered. For instance, Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 (‘IEPF Amendment Rules’) stated that companies would be required to transfer the shares to the IEPF demat account. However, the same did not mentioned anything regarding the expected time frame by which such accounts would open or what would be the modalities of transfer at the depository level. As a result of which corporates kept wondering on the ways to effect the transfer of shares to the IEPF account.
