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The vast repository of corporate data contained within the corporate affairs ministry's MCA-21 registry will be available for research and studies into corporate governance and other related topics.

The ministry has invited proposals for funding up to Rs 50 lakh for research in various topics from integration of the MCA-21 database with other databases to a corporate governance index (CGI) and more, in a notification on Wednesday.

Corporate affairs secretary Injeti Srinivas, constituted an expert committee under the chairmanship of chief economic advisor KV Subramanian to identify areas of research where the MCA-21 registry could be used to further corporate growth from a macroeconomic perspective, as per the notification.

The MCA-21 was implemented by the ministry in 2006 whereby its services were made available online and companies could submit regulatory filings in digital format. The registry has thus become one of the most comprehensive sources of Indian corporate sector data.

"In this process, it has emerged as a repository of corporate sector data in India, which when used for research purposes, shall promote evidence-based policy making...The outcome of this research is to provide actionable policy inputs for the Ministry by utilization of the wealth of data available in the MCA-21 database," it said.

The indicative list of topics provided by the ministry included a bankruptcy prediction model based on the financial statements of companies and a study of related party transactions to identify money laundering.

It also suggested the use of artificial intelligence and machine learning for insolvency forecasts and the study of accounting standards with respect to compliance and congruence with global standards.

As per the funding guidelines, institutions, organisations, agencies and individuals of academic repute or engaged in research in related domains may apply. The timeline for the proposed projects should be within 6 month but can be extended by the expert committee.

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Ministry of Corporate Affairs invites proposals for research into corporate governance using MCA-21 repository

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The vast repository of corporate data contained within the corporate affairs ministry's MCA-21 registry will be available for research and studies into corporate governance and other related topics. The ministry has invited proposals for funding up to Rs 50 lakh for research in various topics from integration of the MCA-21 database with other databases to a corporate governance index (CGI) and more, in a notification on Wednesday.

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NEW DELHI: Successful resolutions of corporate insolvency proceedings till the end of 2019 are set to result in recoveries of Rs 1.52 lakh crore for lenders, averaging 43.1% of their admitted claims of Rs 3.52 lakh crore, according to data released by the Insolvency and Bankruptcy Board of India ( IBBI).

Resolutions in the quarter through December 2019, however, yielded only around 12.2%, or about Rs 2,879 crore, of the admitted claims of Rs 23,668 crore. In the preceding quarter, lenders recovered around 34.4% of their total claims of Rs 78,592 crore.

Many of the large cases have already been resolved and the smaller companies that are undergoing resolution process are finding fewer suitors, said experts, explaining the reason for the fall in recoveries.

"Trends suggest that there are lower recoveries in smaller cases, where there are not many takers for stranded business assets. With many of the larger cases beings resolved or near resolution, we are likely to see lower average recoveries for lenders going forward," said an industry watcher, who wished to remain anonymous.

The Reserve Bank of India had initially referred 12 large nonperforming accounts with outstanding claims of Rs 3.45 lakh crore to be resolved under the Insolvency and Bankruptcy Code.

Seven of these cases have ended with the approval of resolution plans, while in two cases the bankruptcy court has ordered liquidation. Three other cases are currently undergoing the insolvency resolution process.

A total of 190 corporate insolvency proceedings since the IBC came into force have ended with successful resolution plans till December 31, 2019. However, in 57.7% of the proceedings, or 780 cases, the court has ordered liquidation of the corporate debtors' assets.

The IBBI newsletter noted that about 72.5% of the cases that ended with liquidation orders were earlier under the Board of Industrial and Financial Reconstruction regime. "The economic value in most of these CDs (corporate debtors) had already eroded before they were admitted into CIRP (corporate insolvency resolution process," the IBBI release said.

Separately, 579 voluntary liquidation proceedings have been initiated by corporate debtors till the end of 2019.

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Lenders set to recover 43.1% from insolvency proceedings

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NEW DELHI: Successful resolutions of corporate insolvency proceedings till the end of 2019 are set to result in recoveries of Rs 1.52 lakh crore for lenders, averaging 43.1% of their admitted claims of Rs 3.52 lakh crore, according to data released by the Insolvency and Bankruptcy Board of India ( IBBI).

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The insolvency regulator has issued notifications to exclude the lockdown period following the Covid-19 outbreak from the time frames governing corporate insolvency resolution or liquidation processes.

Introducing a special provision in the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the regulator said: "...the period of lockdown imposed by the central government in the wake of Covid-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process." A similar amendment to the regulations for liquidations under the insolvency and bankruptcy code was also notified.

The insolvency and bankruptcy code (IBC) stipulates that the resolution process of a stressed company will have to be completed in a maximum of 270 days.

Accordingly, various processes are to be completed within specified time frames. The amendment to the resolution regulation would come into force retrospectively from March 29, while that to the liquidation regulation would take effect from April 17. The Insolvency and Bankruptcy Board Of India (IBBI) has clarified that given the lockdown, the notifications couldn't be printed in the official gazette on time. However, the regulator had already posted the decisions on its official website well on time, specifying the date from which these amendments would take effect, with a note that these will also be printed in the government's gazette.

So, the apparent retrospective nature of the latest notifications doesn't harm stakeholders' interests.

Commenting on the move, Daizy Chawla, senior partner at Singh & Associates, said: "This was the need of the hour, as due to the lockdown many procedures which are to be done as per the timelines provided under the corporate person regulations as well liquidation process could not be performed and the adjudicating authority (NCLT) would otherwise be flooded with applications for excluding such period or extension of timelines where the period prescribed under the code has already expired."

After the lockdown was announced on March 24, the government has initiated a raft of measures to allay the fears of India Inc. As the prospect of several companies turning bankrupt in the wake of the Covid-19 outbreak loomed large, the cabinet earlier this week cleared a proposal to promulgate an ordinance to suspend insolvency proceedings against new defaulters for six months.

Once the ordinance comes into force following Presidential assent, sections 7,9 and 10 of the Insolvency and Bankruptcy Code (IBC) will remain suspended for six months. Already, in a bid to insulate small businesses from being dragged to the NCLT, the government recently raised default threshold for triggering insolvency to Rs 1 crore from just Rs 1 lakh earlier.

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IBBI excludes lockdown from resolution time frame

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The insolvency regulator has issued notifications to exclude the lockdown period following the Covid-19 outbreak from the time frames governing corporate insolvency resolution or liquidation processes.