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Insolvency resolution of big ticket cases has hit a regulatory bump at CCI which has become dysfunctional due to lack of quorum for over the last three months.
The regulatory vacuum is adversely eroding the value of assets undergoing corporate insolvency resolution process, sources said.
A case in point is the corporate insolvency resolution process of Hindusthan National Glass & Industries Limited (HNG)—market leader in container glass industry. This resolution has hit a roadblock despite approval of Committee of Creditors (COC) as the adjudicating authority (NCLT) is awaiting CCI approval. In the absence of quorum, CCI is not able to process the acquirer’s notice.
Lack of quorum in CCI is impacting M&A transactions falling under CIRP besides impacting international investments. As of now, 16 M&A deals including few international ones running into thousands of crore of rupees are stuck with CCI awaiting approval due to lack of quorum and the statutory time limit of 30 working days to make a preliminary assessment is long overshot, sources added.
Meanwhile, apex industry associations have recently written to the government to immediately address the problem as the delay in CCI approval is adversely affecting the valuation of investments and in few cases, the ‘long stop dates’ of the transactions has also expired.
There has also been suggestions to the corporate affairs ministry to invoke the ‘doctrine of necessity’ to resolve the impasse.
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