Posts

Assessing the Viability of a Gold Spot Exchange in India

-Megha Mittal 

(mittal@vinodkothari.com)

The Securities and Exchange Board of India (‘SEBI’) has issued a consultation paper dated 19th May, 2021, on proposed framework for Gold Exchange in India and draft SEBI (Vault Managers) Regulations, 2021 (‘Consultation Paper’), thereby seeking public comments on the framework for operationalising gold exchange and the regulation of intermediaries inter-alia Vault Managers.

While the idea of setting up a regulated gold exchange was highlighted in the Union Budget 2018-19 as well as in the Budget 2021-22, the Consultation Paper comes as the first concrete step towards bringing into operation a gold exchange for the Indian market. This comes in the backdrop of the fact that despite being the second largest consumer and importer of gold, India continues to be a price-taker – India does not play any significant role in influencing the global price-setting for the commodity. As such, the Consultation Paper envisages an entire ecosystem of trading and physical delivery of gold so as to create a transparent and robust market which paves the way for India to become a global price setter.

That being said, before delving into the procedural aspect, it is important to understand the fundamentals as to what are the objectives being aimed, what would the target market look like, and if at all the proposed framework would put the investors, the parties and the nation in a better place that is today.

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Comments on Discussion Paper on Corporate Liquidation Process

-Resolution Division 

(resolution@vinodkothari.com)

The Insolvency and Bankruptcy Board of India (‘IBBI’/ ‘Board’) issued Discussion Paper on Corporate Liquidation Process, dated 26th August, 2020 (‘DP’)[1] which envisages the introduction of (a) Assignment of Not Readily Realisable Assets (‘NRRA’) and (b) Assignment of Claims/ Interests.

Herein below we put forth our general and specific comments/ suggestions on the DP-

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Forced Contributions to Infructuous Liquidations: Understanding Regulation 2A

-Megha Mittal

(resolution@vinodkothari.com)

Since its inception, the Insolvency and Bankruptcy Code, 2016 (“Code”), along with its regulations, has been subject to many reforms, some aimed at establishing new legal principles and some for removing difficulties faced during the insolvency resolution and/ or liquidation process; one such reform was the introduction of Regulation 2A[1] in the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”), which provides for contribution by financial creditors of the corporate debtor to contribute towards liquidation costs, if so called upon by the liquidator.

In this article, we shall briefly understand the backdrop in which the said provision was introduced, throw light upon the extant provisions and then address the elephant in the room- is it obligatory upon the financial creditors to make such contribution when sought by the liquidator?

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Timely Realisation of Assets by Secured Creditors- IBBI’s Discussion Paper on Liquidation Process Regulations

-Megha Mittal

(resolution@vinodkothari.com

The Insolvency and Bankruptcy Board of India (“IBBI”/ “Board”) has invited comments on its Discussion Paper on Corporate Liquidation Process[1], dated 03.11.2019 (“Discussion Paper”), which essentially deals with two issues which have been the focal point of contrasting opinions as well as judicial interpretation at various instances, i.e. (a) Relinquishment of Security Interest in Corporate Liquidation Process; and (b) Applicability of section 29A of the Code to Compromise and Arrangement.

In this article, the author has delved into the said issues based on the problem statement presented by the Board, and has also attempted to analyse the propose amendments in the Insolvency and Bankruptcy Code, 2016 (“Code”) w.r.t. relinquishment of security interest in corporate liquidation.

We shall discuss the applicability of section 29A of the Code to Compromise and Arrangement in a separate article.

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