Big Fight Erupts between two Govt bodies

by Harish Gupta, National Editor, Lokmat Group

Big Fight Erupts between two Govt bodies

Brings Sale of Sick companies to a Grinding Halt

1200 companies hit 

Harish Gupta

New Delhi, Oct 18

A big fight has broken out between the Enforcement Directorate (ED) and the National Company Law Tribunal bringing the auctioning of sick companies to a grinding halt.

The Enforcement Directorate is firm in implementing the Prevention of Money Laundering Act (PMLA) which stipulates that assets of those involved in money laundering be attached along with the companies they owned. But the Insolvency & Bankruptcy Code (IBC) governing the NCLT and Appellate body are responsible for buying & selling the sick companies numbering nearly 1200.

The tussle brought the light the conflict between the ED under the Finance Ministry and the IBC under the Corporate Ministry with the ED attaching assets of sick Bhushan Power & Steel Ltd (BPSL) which had been purchased by the JSW Steel. The JSW was about to pay Rs 19700 crores for the debt-ridden BPSL. But it withheld the payment after the ED attached its assets. The ED's action, in fact, brought the entire process to a grinding halt at the National Company Law Tribunal (NCLT) which is supervising the sale/purchase of all sick companies in India. As on March 31, 2019, there were 1143 companies which are undergoing resolution process and its rising by the day.

Now the buyers are insisting that after payment of the bid amount, the companies should be free from all past liabilities including the criminal cases. The ED attached assets worth Rs 4000 crores of the Bhushan Power & Steel. The ED has refused to relent and so far the government has not intervened either. The National Company Law Appellate Tribunal (NCLAT) has directed the ED that assets be released forthwith and even asked the JSW Steel not to make the payment until the assets are released. But the ED is not bound by the NCLAT order saying it is governed by the PMLA. The government will have to amend the act if it wants to speed up the sale/purchase of sick companies.

As if this was not enough, ED has gone in appeal to attach the assets of Tech Mahindra to the tune of Rs 822 crores in a fraud case relating to Satyam Computers Services which was acquired by Tech Mahindra in 2009. The matter is sub-judice but giving nightmares to the buyer.

Ends

Fly on the Wall : Modi brings Chinese Acupuncture to India

by Harish Gupta, National Editor, Lokmat Group

Modi brings Chinese Acupuncture to India

Prime Minister Modi's love for China is growing faster than expected after the unprecedented and historic meet at Wuhan between President Xi and Modi. In a major decision, the Modi Government cleared the Chinese therapy –Acupuncture – to be taught and practiced officially in India. If the Chinese can practice Yoga why can't Indian take advantage of the Chinese medical science, goes the argument. The Indian Council of Medical Research (ICMR), after months of discussions and studies, has given its consent that the Acupuncture can be taught and practiced. A full-fledged degree course has been cleared and soon one may find acupuncture Hospital and clinics. Though a couple of state governments had allowed Acupuncture to be practiced. But it was never recognized by the Government of India. The file moved before Modi's visit to China and after confabulations, it has now been cleared. Acupuncture will be an Independent therapy like other forms of treatment. It will be five year degree course. The move was opposed by Yoga and Ayurveda practitioners tooth and nail. They suggested that it be made part of the Naturopathy since its like Acupressure. However, the ICMR expert committee felt that its an intrusive technique and different from the acupressure.

Dalit Out-reach given quiet burial

Prime Minister Modi's pet project of “Dalit Out-reach” has been given quiet burial. The PM wanted that BJP Mps and top leaders and even workers should interact with the Dalits, go to their homes, mingle and have dinners/lunches at their homes. The idea was to bring them closer to the party. The program was launched with big fanfare after serious backlash from the Dalit community who were attacked by the activists considered close to the BJP. But the Dalit Out-reach program made headlines in newspapers and juicy TV stories of a different kind. Sensing that it is proving counter-productive and coming under criticism, it has now been decided toi shelve for some time. Even the RSS chief Mohan Bhagwat suggested that Dalits be invited for dinner/interaction rather than people going to their houses who themselves have meagre means. It is learnt that the program has been given a burial.

How P K Sinha’s extension opened new possibilities

The one year extension to Cabinet Secretary P K Sinha has opened new possibilities for IAS officers who were two notches down the ladder in seniority. By the time Sinha completes his four year extended tenure, the entire 1980 batch of IAS officers would retire including K D Tripathy, Rita Tiwetia and even Hasmukh Adhia. Similarly, some of the 1981 batch officers, too, would attain superannuation in January and March next year. Prominent among them are Rajiv Nayan Choubey and Rakesh Srivastava. This will open immense possibilities for the 1982 batch IAS officers to be new Cabinet secretary post Lok Sabha polls 2019. Irrespective of who wins the 2019 Lok Sabha polls, the officers for such coveted posts are selected on merit. P K Sinha was no Modi-Bhakt and had almost given up the hope when the call came from PMO that he had been selected. And he will be Cabinet Secretary for four years.

It transpires that Cabinet Secretary will be for the 1982 batch that include Union Home Secretary Rajiv Gauba and Telecom Secretary Ms. Aruna Sundararajan. Gauba, by virtue of topping the merit list of the batch, will be best positioned to get the job. Of course, everything will depend on NaMo’s fortunes in the next General Election. For Hasmukh Adhia, there are many possibilities after November 2 when he retires. Either he will continue for extended term of one more year in the Finance Ministry after superannuating or may move to the PMO.

NCLT new power center

If you thought Supreme Court is the biggest grosser place for senior advocates who charge astronomical fee from clients, you may be in for some surprise. It transpires that National Company Law Tribunal (NCLT) which came into being on June 1, 2016 is the most crowded place. Be it lawyers, businessmen, professionals, companies, advisers all are making a bee line for the big mega bucks. There are around 600 companies which are up for the grab under the Insolvency and Bankruptcy Code (IBC) through a cumbersome process of bidding. These 600 odd-companies have NPAs of almost Rs 10 lakh crores of the banks. Now the banks have initiated the process of recovering their monies through the NCLT. In the first phase, 12 major companies involving Rs 2 lakh crores are to be settled within the next 60 days. The deadline for these 12 companies was 270 days which is now coming to an end. Interestingly, the lender banks are taking a haircut of as much as 75% of loan amount. Obviously, the buyers are surely making a killing. The big money is on the table and hence the big line up. The lawyers and Insolvency Professionals are making a killing, sources say and almost all senior counsel preferring to be at the NCLT building rather than at the SC.

Sword hangs over contractual employees in Prasar Bharati

After the Information & Broadcasting Ministry sent a missive early this year suggesting that Prasar Bharati stop engaging consultants on contract and also not grant extension/ renewal to them, it created a flutter. The Prasar Bharati has more than one thousand contractual employees on its rolls. The number in Doordarshan and Prasar Bharati as on 31st January, 2018 was as high as 336 and 885 respectively. It had been alleged that consultants are hired in Prasar Bharati at whims & fences without assessment of need, formal approval or selection by transparent manner with reference to a set of qualification, skills and experience. The ministry pointed out in its letter that the engagement was without ‘assessment of need, the formal approval or selection by a transparent manner with reference to a set of qualifications, skills and experience’. Though the ministry made it clear that it is not issuing a directive to Prasar Bharati to terminate the services of the contractual employees. But asserted that such contractual hiring contravenes the order of Department of Expenditure.

Fly on the wall : IBC Code divided the Cabinet, for a change

by Harish Gupta, National Editor, Lokmat Group

fly on the wall 

IBC Code divided the Cabinet, for a change

For a change, Union Cabinet witnessed some prolonged if not heated discussions when the Insolvency Bankruptcy Code (IBC) Ordinance was brought before it. A couple of Cabinet Ministers felt that if the purpose of the Ordinance is to revive 500 sick companies, it will be rather detrimental. But the Finance and Corporate Affairs Minister Arun Jaitley argued that if this Ordinance is brought, then all sick companies will be grabbed by the relatives and friends of those promoters who had looted them for decades. The actual value of these companies is less than 50%. The government wants that new genuine promoters should come forward. Some ministers said the Ordinance is so stringent that there will be no buyers left. When a another senior minister quipped that it would impossible to find such buyers in India, Jaitley said world is looking at India how this government is dealing with corrupt promoters. Another minister pointed out to Jaitley that the money was lent to these companies by the banks and let the banks be given free hand to deal with the situation. Why the government was interfering in the process. At this, Jaitley got irritated but replied in a coll manner that the IBC was evolved only after intense consultations with the bank who are finding themselves unable to deal with the crisis. The willful defaulters are creating all sorts of hurdles in selling these companies after milking them for decades. The government won't allow any relative to buy the sick company of another relative. Prime Minister Modi maintained a complete silence when the debate was going on the Ordinance. The Ordinance was later issued and now set to be challenged.

Sonia to continue as CPP chairman as Rahul cracks whip

Rahul Gandhi has done what none including Sonia Gandhi dared in the past; suspending senior leader of late Rajiv Gandhi era. Manishankar Aiyer who was an IFS, quit his job and joined Rajiv Gandhi and never looked back. He held key positions and often put Dr Manmohan Singh and Sonia Gandhi in trouble for his remarks all these years. But nobody touched him as he was an “uncle” to the Gandhis. Aiyer thought the storm over his “neech” remark will blow over with his “half-hearted regret” and that too with riders. Rahul Gandhi was furious when Aiyer didn't tender unqualified apology as directed and cracked the whip. Though Rahul Gandhi wants to carry the oldies in the party with him and won't reshuffle the pack after assuming office of the Congress president on December 16. But he won't sack anybody. Meanwhile, it is unclear whether Ahmad Patel who is Political Adviser to Congress President (CP) will continue to hold the post. It is clear that Rahul doesn't want political adviser and will rely on the “entire leadership” rather than one individual. It is yet to be seen if Ahmad Patel is made political adviser to the Chairman of the CPP (Congress Parliamentary Party) or not. It is emerging that Sonia Gandhi will continue to be the chairman of the Congress Parliamentary Party until the 2019 Lok Sabha polls. Congressmen say that while Sonia Gandhi always avoided taking risks, Rahul Gandhi is no-nonsense kind of a person and by suspending Aiyer, he has sent a signal to senior leaders to keep their tongue under check.

Akola makes Yashwant Sinha a mass leader, BJP worried 

Yashwant Sinha may be in political wilderness and a loner. But over-night, he made the ruling party worried when he landed in Akola in Maharashtra and forced the Fadnavis government to concede all the six demands of the farmers. The tremendous success in a short span of time of the farmers' agitation surprised political class as Sinha was able to mobilise the support of not only local farmers but also West Bengal Chief Minister Mamata Banerjee and other parties looking for a leader worth a salt. She dispatched Dinesh Trivedi and now it transpires that Swabhiman Paskha Party, Aam Aadmi Party, Biju Janata Dal and several others may swim in the troubled waters in BJP ruled states. They have got a leader in Yashwant Sinha who is 80 years plus and working hard to engineer a revolt within the BJP too. Don't dismiss the 80 year old job seeker as he is enjoying a new role of farmers messiah. One will have to wait for some more time how things take shape.

She-Box Zeal takes Maneka no where

Maneka Gandhi launched the a comprehensive She-Box, an online complaint management system for working women to lodge complaints of sexual harassment at work places. This was under the Sexual Harassment of Women at Workplace (Prevention, prohibition and Redressal ) Act which is called the She Act 2013. it was passed during the UPA regime but Maneka has been focusing on its tough implementation ever since she became a minister in 2014. Its an online portal facility and covers even those who have already filed their complaints to the private or government companies or department. The ministry published even a handbook to pretext the dignity and safety of women. The PIB churned out a huge handout of the launching of the She Box on November 7. But shockingly, the same handout with verbatim words was issued by the same ministry on the same subject six months ago, on July 24 to be precise. The Press Information Bureau has both the press releases on its website with a five months gap. The Fly was told that ministers are under so much of pressure from the PMO to show activities relating to their ministries in the media that even when they have no event, they are forced to create an event. Maneka hit upon the idea of recycling press bulletins.