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INSOLVENCY AND BANKRUPTCY NEWS

Avoidance Transactions Voluntary Liquidation

The Code read with Regulations require the RPs and Liquidators to le A corporate person may initiate voluntary liquidation proceeding if
applications for avoidance of transactions, with the AA seeking appropriate majority of the directors or designated partners of the corporate person
directions. 777 applications seeking avoidance of transactions have been make a declaration to the effect that (i) the corporate person has no debt or
led with the AA till March 31, 2022, as presented in Table 4. it will be able to pay its debts in full, from the proceeds of the assets to be
sold under the proposed liquidation, and (ii) the corporate person is not
Table 4: Details of avoidance applications and disposal Amount (in ` crore)
Sl. Nature of Transactions Applications Filed Applications Disposed being liquidated to defraud any person. At the end of March 31, 2022, 1223
No. Number of Amount Number of Amount Amount corporate persons initiated voluntary liquidation (Figure 18). Final reports
transactions involved transactions involved clawed back
1 Preferential 123 14435.39 20 518.45 29.17 in respect of 644 voluntary liquidations have been submitted and twelve
2 Undervalued 15 884.31 1 351.64 0 processes have been withdrawn by March 31, 2022. The status of 567
3 Fraudulent 132 21759.68 10 353.96 3.69
4 Extortionate 3 70.68 - - - ongoing voluntary liquidations is presented in Figure 19.
5 Combination 504 183511.04 40 13881.95 16.58*
Total 777 220661.10 71 15106.00 49.44
Figure 18: Commencement of Voluntary Liquidations
*In addition, in the matter of Jaypee Infra, possession of 758 acres out of total 858 acres of land was given back to
the CD. The 858 acres of land was earlier valued at ` 5500 Crore.
1223
Twelve Large Accounts 942
Resolution of 12 large accounts were initiated by banks, as directed by RBI. 690
They had an aggregate outstanding claim of ` 3.45 lakh crore as against
liquidation value of ₹ 73,220 crore. Of these, resolution plan in respect of
eight CDs were approved and orders for liquidations were issued in 656
respect of two CDs. Thus, CIRPs in respect of two CDs and liquidation in 416
respect of two CDs are ongoing and are at different stages of the process. 431
The status of the 12 large accounts is presented in Figure 17. 251
184
115
Figure 17: Realisation by the Claimants as % of the 11
Liquidation Value
As on As on As on As on As on
387% March 18 March 19 March 20 March 21 March 22
Jyoti Structures
Commenced Closed
267%
Essar Steel India
253% Figure 19: Timeline of Ongoing Voluntary Liqudations
Bhushan Steel
209%
Bhushan Power & Steel
35%
183%
Electrosteel Steels
170%
Amtek Auto
123% 20%
Monnet Ispat & Energy 18%
115%
Alok Industries 11% 11%
5%
Resolution of FiSPs
On an application led by the RBI to initiate CIRP against Dewan Housing
Finance Corporation Ltd (DHFL), the AA admitted the application on
> Two years > One year > 270 days > 180 days > 90 days ≤ 90 days
December 3, 2019. Mr. R. Subramaniakumar was appointed as the ≤ Two years ≤ 1 year ≤ 270 days ≤ 180 days
Administrator. This is the rst nancial service provider (FiSP) admitted for
resolution under the Insolvency and Bankruptcy (Insolvency and Of the 1223 corporate persons that initiated voluntary liquidations till
Liquidation Proceedings of Financial Service Providers and Application to March 31, 2022, the reasons for these initiations are available for 1023
Adjudicating Authority) Rules, 2019, which were notied on November cases, which are presented in Figure 20. Most of these corporate persons
15, 2019. The AA, vide order dated June 7, 2021, approved the resolution
plan submitted by Piramal Capital and Housing Finance Ltd. Subsequently are small entities. 645 of them have paid-up equity capital of less than ₹ 1
CIRPs have been initiated for three FiSPs namely Srei Equipment Finance crore. Only 136 of them have paid-up capital exceeding ₹ 5 crore. The
Limited, Srei Infrastructure Finance Limited and Reliance Capital Limited corporate persons, for which details are available, have an aggregate paid-
and are underway. up capital of ₹ 7166 crore (Table 5).

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