Rs 25,000-cr boost for realty: Govt sets up fund to revive stalled projects

Targeted at affordable and middle-income housing units, the fund will address residential properties in Mumbai that are priced below Rs 2 crore

The Union Cabinet on Wednesday approved the setting up of a Rs 25,000-crore alternative investment fund (AIF) to revive around 1,600 stalled housing projects across top cities in the country. The AIF will be a special window to provide priority debt financing for completion of projects in the affordable and middle-income categories, Finance Minister Nirmala Sitharaman said after the Cabinet meeting.

In a move expected to bring significant relief to homebuyers as well as businesses, the government has decided to include projects declared as non-performing assets and those which are undergoing insolvency at the National Company Law Tribunal (NCLT) to be considered for financing from the AIF. The funding will be possible only if they are registered under the Real Estate (Regulation and Development) Act or RERA.

However, those which have already got orders from NCLT for liquidation will not be considered. The Cabinet decision is a modification of an earlier stimulus package announced by the FM in September, when she had kept NPA and insolvency projects out of the AIF purview.

The inclusion of projects under NPA and NCLT proceedings would help cover almost 80 per cent projects in some of the key property markets such as NCR and Mumbai, according to Samir Jasuja, founder at Propequity, a real estate research firm…

SC quashes RBI insolvency circular, relief for power assets worth Rs 2-trn

More than 24 stressed power projects that could have faced insolvency proceedings will now find it hard to get buyers because they are “incomplete”

Companies News: The Supreme Court (SC) on Monday provided a huge relief to thermal power projects worth Rs 2 trillion that were facing the threat of insolvency. The apex court held a 12 February 2018 circular of the Reserve Bank of India (RBI), which ordered banks to classify companies as ‘stressed’ if they default on loans even for a day, to be ‘ultra vires’. The SC said that the circular that applied to numerous defaulting assets in power, sugar, shipping and companies in other sectors to be beyond the RBI’s legal powers. A detailed copy of the judgement is awaited.

The February 12 circular allowed 180 days for the debt resolution of companies with loan accounts over Rs 2,000 crore, failing which the asset would have to be taken to the National Company Law Tribunal (NCLT) for insolvency action. The 180-day deadline got over on 31 August 2018. However, most companies took the legal route to avoid being dragged to NCLT. The last financial year closed with only one power asset successfully completing debt resolution.

Power companies such as Essar Power, GMR Energy, KSK Energy, and Rattan India Power as well as The Association of Power Producers (APP) and Independent Power Producers Association of India had moved the Supreme Court in August last year, challenging the constitutional validity of the RBI circular.

In their submission, the power companies pleaded for relief from the circular as several resolution plans are under implementation. Power companies also said the ‘one size fits all’ approach of the RBI doesn’t suit them as they are governed by different regulations…

NCLT overrules Mistry in Tata boardroom battle, says he lost board’s trust

Mistry, who was the sixth chairman of the group, was removed from the position in October 2016

 

The National Company Law Tribunal (NCLT) dismissed on Monday Cyrus Mistry’s plea against his ouster as the chairman of the Tata Sons group and allegations of mismanagement in the company, TV news channels reported.

NCLT ruled that Mistry openly went against the board of directors, according to the reports. NCLT also said the board was competent to remove an executive chairman, a ruling that is being viewed as a vindication of the group after a long-drawn boardroom battle.

Mistry’s petition filed under the Companies Act claimed that his removal was due to the result of mismanagement by the board’s trustees and oppression of minority shareholders of the group. (TATA MOTORS SHARE PRICE)

“This has never been a battle of egos, but fight for good governance. (We) will look to appeal on all counts,” ET Now quoted Mistry’s counsel as saying.

Mohan Parasaran, counsel for Ratan Tata, told ET Now: “(We) Have to see fineprint of the NCLT order. I believe all appeals have been dismissed.” Parasaran also told CNBC-TV18 that the plea with regard to the conversion of Tata Sons into a private company would be heard later. Parasaran added that Mistry might file an appeal in 2-3 weeks against the NCLT’s order.Mistry, who took over as the chairman in 2012 after Ratan Tata announced his retirement, was removed from the position in October 2016.

His ouster sparked a lengthy corporate feud involving an unprecedented war of words in the Tata Group’s 150-year-old history. Both sides exchanged barbs through defamation suits, hundreds of affidavits and references to past emails and letters.

Mistry’s camp alleged excessive interference by Tata Trusts and said Ratan Tata’s influence was behind Mistry’s ouster. But NCLT said Mistry was removed because the board and its members lost confidence in him, according to news agency PTI.

Article Source : BS