Greetings to all on behalf of the entire team of SB Partners.
Hope you are keeping safe and doing well.
On account of COVID-19, the government has taken various measures to mitigate the effect of economic disruptions caused by the pandemic. In this issue of Lex Novus, we have summarised the amendments made to corporate and financial laws to assuage the difficulties posed by the pandemic.
Most notably, the Reserve Bank of India has permitted lending institutions to provide a moratorium period for all the instalments falling due between March 01, 2020 and May 31, 2020 without triggering an asset downgrade. In order to prevent triggering of insolvency proceedings due to financial distress caused by the pandemic, (a) the threshold for default under the Insolvency and Bankruptcy Code, 2016 (“Bankruptcy Code”) has been increased from Rs.1 lac to Rs.1 crore, and (b) the government has decided to suspend the filing of fresh insolvency proceedings under the Bankruptcy Code by financial creditors, operational creditors and the corporates for six (6) months which may be extended up to one (1) year.
In addition to the foregoing, this issue of ‘Lex Novus’ also focuses on relaxations and extensions provided by the Ministry of Corporate Affairs and Securities and Exchange Board of India (“SEBI”) for various compliance requirements, such as relaxations to hold meetings and extensions for filing forms, reports and documents, etc., under the Companies Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Further, we have analysed orders of High Courts of Delhi and Bombay, which seek to protect commercial transactions on account of the pandemic, by staying invocation of pledged shares and bank guarantees.
We hope you find this edition of Lex Novus informative and insightful.
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