Twelve wilful defaulters of corporate India attempted to buy stressed assets, prompting the government to ask banks to be vigilant.
Is Modi protecting the loan-defaulting dirty dozen of India Inc., or is he calling them to account?
The question is, can these wilful defaulters bid for the companies or not?
A wilful defaulter is one who has been siphoning off funds from the company. Like in the case of Adani, there was a 100-page Directorate of Revenue Intelligence notice which clearly showed in graphic detail how he siphoned out money by over-invoicing. The same thing has happened in the case of Sterling Biotech, in which the CBI has registered two FIRs. The problem of non-performing assets (NPA) is also because of this. These people take large bank loans on the basis of over-invoiced bills.
Also, insolvency under this code can be easily created and declared. When you are declared bankrupt, all proceedings against the company come to a standstill. Often, promoters have given their personal guarantees, but they declare bankruptcy without the creditor carrying out the process of recovering the debt from these personal guarantees. Amrapali is one case. Only if the personal asset is found insufficient should you declare bankruptcy.
Here are other sharp perspectives on wilful defaulters:
Rajeev Chandrasekhar, MP
Shekhar Gupta, Editor-in-Chief, ThePrint
Jaithirth Rao, entrepreneur and writer
The insolvency professional or interim resolution professional (IRP) appointed is sometimes their own chartered accountant. In the case of Amrapali, it was Deloitte. Often, these have been complicit in the siphoning of funds, as in the case of Satyam & PwC. They were complicit in allowing Satyam to siphon out the funds. These IRPs will determine what is to be done, who will run the company, and what is to be sold off.
So, this bankruptcy bill is designed, or at least will be used, to protect the bigwigs who have run away with company funds.
First, you must probe if money has been siphoned off. There are cases against big industrialists where shell companies in Singapore have been used to invest money here. It was obvious that money had been siphoned off. But nothing was done. All the bigwigs are being protected.