Money & Banking
RBI allows banks to control company if debt restructuring fails
The Reserve Bank of India (RBI) on Monday allowed banks to recast a company's debt under a "strategic debt restructuring" (SDR) scheme wherein the lender must hold 51 percent or more of the equity after the debt-for-share conversion.
 
"Post the conversion, all lenders under the JLF (joint lenders' forum) must collectively hold 51 percent or more of the equity shares issued by the company," the RBI said in a notification.
 
The central bank said that banks will have to closely monitor the performance of the company and should appoint professional management to run the company. At the same time, the banks themselves should try and sell their stake "as soon as possible," it added.
 
The RBI announced a set of guidelines on the SDR scheme, which provides a more flexible process for lenders to recover bad loans.
 
Other measures announced on Monday include allowing lenders to convert debt to equity within 30 days of the review of the company accounts.
 
Moreover, lenders who acquire shares of a listed company under a restructuring will be exempted from making an open offer, as per rules from capital markets regulator Securities and Exchange Board of India (Sebi), the RBI said.
 
Sebi had already allowed such conversion of loan into equity shares on March 22.
 
These restructuring norms will apply to all company accounts before Monday, the RBI said.

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Merkel says 'there isn't much time left' for Greece
German Chancellor Angela Merkel on Monday warned that time is running out for a deal with Greece's creditors, and insisted that solidarity with European partners and the International Monetary Fund would be contingent on Greece's initiative to implement reforms.
 
"There isn't much time left. Everyone is working intensively. The day after tomorrow there will be opportunity to discuss it with the Greek prime minister. Every day counts now," Merkel said in a press conference after the conclusion of the G7 summit in the Schloss Elmau hotel in southern Germany.
 
Merkel added that the Greek financial crisis was one of many issues discussed in the meeting, which she attended on Monday along with Jean-Claude Juncker, the president of the European Commission, or EC, and managing director of the IMF, Christine Lagarde.
 
Merkel reiterated that all summit attendees want Greece to remain in the Eurozone, but reminded that there are rules that govern the union and that European and international solidarity must be matched by member countries' own efforts.
 
Merkel argued that measures taken by the troika (EC, IMF and the European Central Bank, or ECB) proved to be effective in the cases of Ireland, which thrived after applying a tough reform program, Spain and Portugal, which created jobs despite ongoing high unemployment rates.
 
Merkel pointed out that the situation in Cypress also leads to a path of "success".
 
The German chancellor confirmed her intention to meet again with Greek Prime Minister Alexis Tsipras in Brussels on June 17 under the auspices of the EU summit meeting with the Community of Latin American and Caribbean States, or CELAC.
 
In her view, the proposal presented to Athens by the three creditor institutions is "a breakthrough" that must be negotiated. 

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SEBI lets off Emkay for just Rs11 lakh

Without admission or denial of guilt on the part of Emkay  to the  findings  of fact or conclusions  of  law,  Emkay  has remitted  a  sum  of  Rs11,00,800 favouring SEBI  towards the terms of settlement in the matter

 

Securities and Exchange Board of India (SEBI) initiated adjudication  proceedings against Emkay  Global  Financial  Services, to  inquire  into  and  adjudge  under  Section 15HB of the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) the violation of Clause A(2)  of  Code of Conduct for Stock Brokers as specified under Regulation 7 of  SEBI Stock Brokers and Sub Brokers Regulations, 1992   alleged to have been committed by Emkay with respect to  its  dealing  in  the  scrip  of  Aarey  Drugs  and  Pharmaceuticals Ltd. ('ADPL').
 
In this regard a Show Cause Notice no. A&E/EAD3/DRK-AKS/20949/2013 dated 19.08.2013 (‘SCN’) was served on Emkay which alleged  that  it  had  executed synchronised trades in the scrip of ADPL on behalf of its clients Nita B Bhavsar,  Jipal  Shah,  Dhavalkumar  Soni  and  C  Shah Champaklal wherein Emkay had acted as both stock broker and counter party  stock  broker. Some of the trades were executed from the same terminal also.  Emkay’s alleged failure to exercise due skill and care made it liable for a monetary penalty under Section 15 HB of the SEBI Act.
 
Pending adjudication proceedings, Emkay submitted a consent application in December 2013 to SEBI for settlement of the case. Later, Emkay representatives submitted before SEBI the revised settlement terms with an amount of Rs11,00,800 towards settlement charges. The settlement terms were placed before the High Powered Advisory Committee on Consent, which looked into the matter and recommended the case for settlement.
 
Without admission or denial of guilt on the part of Emkay  to the  findings  of  fact  or conclusions  of  law,  Emkay  has remitted  a  sum  of  Rs11,00,800 favouring  SEBI towards the terms of settlement in the matter.
 
SEBI said that the settlement order is passed on 5 June, 2015 and shall come into force with immediate effect.
 

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