The amendment to the Insolvency and Bankruptcy Code ordinance passed by the President certainly prohibits wilful defaulters associated with NPAs from regaining control of the defaulting company or stressed assets through the back door.
If such people are associated with other applicants they may quote a higher rate in order to acquire their own assets. The guarantors are also barred from this. But along with this another clause should be added that close relatives or friends also must be prohibited from entering the fray.
The biggest concern is that they will cause disruption in all insolvency proceedings because the eligibility of the bidders will have to be ascertained before examining their bids. In this process if the total time of 270 days has elapsed the debtor will be pushed into liquidation. The accounts referred to IBC must be settled as per norms in quick time.
TSN Rao
Bheemavaram, Andhra Pradesh
It is not only legally incorrect but also ethically wrong to allow defaulters and promoters of defunct companies to bid for the assets under IBC proceedings.
First , it is clearly established that defaulters have enough funds to bid for the assets. Second, the bidders are interested in the businesses under IBC proceedings since they find it viable to run the business and anticipate remunerative cash flows. Third, the defaulting borrowers want to benefit from the huge haircuts banks are offering out of their hard-earned profits .
This makes it clear that corporates who owe large sums are in possession of adequate cash resources. The Government should identify such sources and pressure defaulters to service their existing loans by making wilful default a criminal offence.
S Veeraraghavan
Madurai
Safer ATMs
This refers to ‘Cash woes persist in rural India as ATMs disappear’ (November 24). Even in Mumbai, there’s no cash in some ATMs. There are also security concerns, what with hidden cameras recording PINs.
Not many know that it is mandatory for an ATM to have PIN Number Reversal facility. This helps when a card-holder is forced to withdraw money by a robber. The police can be notified if you enter your PIN in reverse order. The ATM will still dispense the cash asked for but unknown to the robber, the police will be notified.
The law requires every ATM to have this emergency reversal sequence. It is safer to use branch ATMs than off-site ATMs. It also pays to carry a cheque leaf in case the ATM is not working.
Deendayal M Lulla
Villagers’ predicament
It is learnt that shortage of rupee notes has resulted in the closure of over 1,000 ATMs in rural India. We can say that the implementation of any new policy (say, demonetisation) will have difficulties initially. If the problem persists for over a year, then the plan has not been effected with commitment. India, Gandhi said, lives in the villages. But villagers find it difficult to live in India, thanks to demonetisation and hasty industrial policies announced every now and then.
S Ramakrishnasayee
Ranipet, Tamil Nadu
Dirty politics
This refers to your editorial, ‘Princess diaries’ (November 23 ). Supremacy of the rule of law is the hallmark of democracy as against the supremacy of the feudal order. The aim of the freedom struggle was not merely to achieve political freedom from the British but also to liberate India from feudalism.
Unfortunately the government of Rajasthan, supposedly the custodian of the rule of law, is collaborating with a fringe group to make a mockery of the rule of law for narrow political gains. Other political parties are also following the same path.
A fringe group is openly threatening violence against the actors/director of the film Padmavati and the State government is associating with such a group. It obviously means there is no law and order. Let a statutory authority, the CBFC or the court, decide the issue,if any.
Trupti Goyal
Jodhpur, Rajasthan
LETTERS TO THE EDITOR
Send your letters by email to bleditor@thehindu.co.in or by post to ‘Letters to the Editor’, The Hindu Business Line, Kasturi Buildings, 859-860, Anna Salai, Chennai 600002.