Page 11 - Banking Fiannce March 2018

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Allow promoters of SMEs facing insolvency to bid for Refund applications from
their own companies: expert body PACL investors

Mamta Binani, founder member of the All India Insolvency The Securities and Exchange Board of
Professional Association (AIIPA), mentioned that the associa- India (SEBI)
tion has written to the Centre seeking permission to allow invited refund
promoters of small and medium enterprises to bid for teir applications
companies against which insolvency proceedings have begun. from investors
However, it comes with a fair amount of restrictions so that of PACL Ltd,
fraudulent activities are kept away. which has col-
lected over Rs 49,100 crore from small
"There are quite a number of SMEs which do not have bidders. Hopefully, the
government makes an exception where promoters are allowed to bid. This would investors (upto Rs. 2500) through vari-
save employment as well as entrepreneurship," said Binani, during an interac- ous collective investment schemes
(CIS) over 15 years. This is the first pay-
tion on 'Insolvency and Bankruptcy Code, 2016' organised jointly by the Finan- out by SEBI in this case.
cial Journalists Club and Press Club, Kolkata.
"…the committee has decided to re-
Coconut products' exported worth Rs. 2084cr ceive claims from such investors
whose total outstanding amount
Union Agriculture Minister Radha Mohan said that co-
(Principal) with PACL is up to Rs
conut products worth Rs 2,084 crore had been ex-
ported in FY 2016-17. "In the year 2016, we started 2,500. It is clarified that refund may
exporting coconut oil to Malaysia, Indonesia, and Sri not necessarily be Rs 2,500 per
claimant investor, and would be ef-
Lanka, the countries from where we were importing fected on a pro-rata basis after con-
earlier. For the first time, desiccated coconut is being
sidering the number of claims re-
exported to the US and Europe in large quantities from India," Singh added.
ceived as well as the funds available
Base year for GDP, IIP with the committee," said SEBI.

To calculate GDP and IIP numbers, the base year would be changed to 2017- The eligible investors were advised
18, whereas the retail inflation for the year would be to send their refund applications via
revised to 2018. "During 2018-19, the Ministry is pro- text messages or by uploading the
posing to initiate steps to revise the base years of Gross details on its website by February 28,
Domestic Product (GDP), Index of Industrial Production in a prescribed format, as available
(IIP) and Consumer Price Index (CPI) to accommodate on website. About three years ago,
and factor the changes that take place in the economic the regulator had directed PACL to
scenario of the country," said Union Minister D V Sadananda Gowda. refund Rs 49,100 crore to investors.

BANKING FINANCE | MARCH | 2018 | 11