The LighthouseUnravelling the Insolvency andBankruptcy Code (IBC) 2016

Focusing on corporates, Mr Vakil explained that whilst the IBC could be triggered by the Financial Creditor (minimum payment default of Rs 100,000) or the Operational Creditor or the Corporate debtor, it was a two-step process:

Applauding the tight deadlines set for the entire process from the date of default to submission of the Resolution plan to NCLT which has to be completed within 180 days (extendable exceptionally to 270 days), Mr Vakil also mentioned that the existing RBI statutes on stressed assets had also been tightened especially where the gross exposure of lenders was equal to or over INR 20Bn to trigger action under the IBC if a resolution plan was not worked out expeditiously between the creditors and the company. This has resulted in close to 70 big companies accounting for Rs 3.8 trillion of debt heading for resolution under IBC (ICRA estimates). Multiple companies belong to the power, telecom & EPC sector.

The highly educative and informative talk ended with Mr Vakil taking the audience through the recent judgements in the high-profile cases of Binani Cement, Jaypee Infratech, Essar Steel and Bhushan Power and Steel.

The first step necessitates that the board of directors be suspended, and an Insolvency Resolution Professional (IRP) be vested with the powers of the board who manages the affairs of the company as a going concern. There is also a moratorium imposed prohibiting the following: Institution of any suit or legal proceeding; transfer/encumber/dispose assets of the company; enforcement of any security interest; recovery by owner of property in debtor's possession; and termination of supply of essential goods/services.

One of the fundamental features of the Code is that it allows creditors to assess the viability of a debtor as a business decision and agree upon a plan for its revival or a speedy liquidation as against the existing judicial processes, which are debtor driven. The Code creates a new institutional framework, consisting of a regulator, insolvency professionals,

information utilities and adjudicatory mechanisms, that will facilitate a formal and time bound insolvency resolution process and liquidation.Compared to the extant and laborious

judicial process where historically recoveries have been only a little over 25 cents to the dollar compared to 70-80% in other developed countries and insolvency resolution takes on an average 4.5 years compared to 1-1.5 years in developed nations, in the short two years that the IBC has been in force, financial creditors such as banks have recovered close to 50K crore, a little over 55% of their claims. Though early days, Mr Vakil said that this was greatly encouraging. Of the over 5,000 cases filed, 1279 have been admitted and resolution process initiated. Of these number of liquidations have been 252 and number of resolutions 52.

The Government is proposing a separate framework for bankruptcy resolution in failing banks and financial sector entities.

Despite the legalese, Mr Vakil ensured that the session remained highly interactive by allowing questions from the floor during the presentation rather than at the end. In addition to attenuating the tedium, this also helped members understand the issues better.

Insolvency Resolution Process, during which financial creditors assess whether the debtor's business is viable to continue and the options for its rescue and revival; and Liquidation, if the insolvency resolution process fails or financial creditors decide to wind down and distribute the assets of the debtor.

Companies and LLPs are covered under IBC with the Adjudicating Authority (AA) the as the National Company Law Tribunal (NCLT), whilst Individuals and Partnerships (other than financial firms), have the Debt Recover Tribunal (DRT) as the AA.

Mr Vakil also explained the waterfall structure of payments, the important admission of the treatment of homebuyers as financial creditors and the recent changes of reduction of voting thresholds of the committee of creditors which had eased the pressure from dissenting creditors and improved the process.

BULLETIN OF THE ROTARY CLUB OF MADRAS | 2018-19

Edition 19 | November 27, 2018 | Pages 4

RCM was indeed fortunate to have a legal stalwart as Bahram Vakil of AZB and one of the architects of the IBC to demystify the intricacies of the codeRtn. Bhaswar Mukherjee

2NOVEMBER 27, 2018

min

utes

Sgt-at-arms Rtn Jayant Hemdev collared President

of the day PE Rtn Dr Vijayabharathi Rangarajan, who is deputing on behalf of Pres Rtn Ranjit Pratap who is travelling abroad.

Secretary Rtn Prabha Srinivasan played a video on a general theme, on doing everything right, even the small things which are very important in everyone's lives.

PE Dr Vijayabharathi welcomed the Probus Club members, guests introduced by members who have come for the meeting.

PE Dr Vijayabharathi greeted members/spouses who celebrate their birthday/wedding anniversary that week and thanked them for their sunshine.

Secy Rtn Prabha announced that members have to RSVP for the 4th Dec'18, for the Alexander Babu comedy night, and also to be in the hall in time at 7 pm. The seats are on a first-come-first-served basis. Those who do not RSVP will be seated only after those who have 'RSVPed' have been seated. So the Secy insisted that members arrive in time and also RSVP. The fellowship and special meetings committees are working very hard to give members a night to remember and a New York comedy club experience.

The Secy said that the Calcutta trip is planned from Jan 25-28 and more details about the flight, etc. will follow.

Also the RCM notice on the adoption of RCM accounts on the 26th Dec'18 Wednesday, will be sent

Rtn Alok Bhargava introduced his schoolmate, speaker Mr Bahram N. Vakil, founding partner of AZB & Partners, one of India's leading law firms. He was a member of the Bankruptcy Law Reform Committee (which provided and led to the implementation of the IBC) and is currently serving on a Committee that has proposed amendments to the IBC. Bahram is recognized by Chambers and Partners, Legal 500 and other publications as a leading lawyer for restructuring, banking and project finance in India. Bahram

has also served as a member on various high-level government committees on financial reform, foreign direct investment and securities market reform.

Rtn Iqbal Sait referred to some of the quotes about Mr Vakil taken from the net —a hard-headed gregarious lawyer, who provides smart, practical and reliable advice, king of the power sector etc… He said that it shows that every quote attributed was appropriate to Mr Vakil, and commented that many points were learnt about the IBC. He thanked Mr. Vakil for his very informative speech.

PE Dr Vijayabharathi presented a memento on behalf of the RCM.

The Speaker Mr Vakil spoke on 'The Insolvency and Bankruptcy Code (IBC)'. IBC has been lauded by all sections of society and has put the fear of the law into wilful defaulting promoters, however, its implementation has been anything but smooth. The Indian legal system seems to

have gotten the better of the time-bound resolution process envisaged by the IBC. Mr Bahram Vakil spoke about the journey of the IBC so far, as well as its way forward. Mr Vakil spoke of many interesting case studies with the aid of a PPT and took questions from the floor.

The meeting was then adjourned.

BIRTHDAYS

6th Dec – Ann.Narayani

7th Dec – Rtn Bharat B Mohindra

(Rtn Ravi Moorthy)

4th Dec – Rtn M Balasubramanian

5th Dec – Ann.Shubada (Rtn Ashok Vardhan Shetty)

4th Dec – Rtn Hiren B Shah Ann.Nita10th Dec – Rtn Dr V Ramasubramanian Ann.Aruna

Rtn PP Nandita Krishnan – `2000Rtn.Vipin Sachdev – `4000

Rtn Ravimoorthy – `1000

Rtn Bharat B Mohindra – `1000Rtn Dr V Ramasubramanian – `2000

Rtn Suniel U Lulla – `2000

SUNSHINE

WEDDING

Our thoughts with his family during this time of loss.

The Rotary Club of Madras mourns the passing ofRtn. A. Namsivayam, MD, Newlink, at 4p.m. on 2.12.2018. May his soul rest in peace.

IN MEMORIUM

3NOVEMBER 27, 2018

SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY

2 3 4 5 6 7 8

9 10 11 12 13 14 15

23 24 25 26 27 28 29

30 31

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RCM DECEMBER 2018

Special Meeting:An eveningwith Alex(7 pm)

My JobTalks

TRF foundation meet on third week of October

Full ClubFellowship(MC ChristmasParty)

No meeting(Christmas)

RCMAccounts

No meeting

DIRECTOR SERVICE PROJECT 1Rtn. S. Ravi

DIRECTOR SERVICE PROJECT 2Rtn. R. Ravishankar

DIRECTOR VOCATIONAL SERVICERtn. Vinod Kumar

PRESIDENTRtn. Ranjit Pratap

DIRECTOR ROTARY FOUNDATION &INTERNATIONAL SERVICESRtn. M. Balasubramaniam

TREASURER (CLUB FUNDS)Rtn. Mohan Raman

TREASURER(SPECIAL PROJECTS)Rtn. Gooch Kumar A

PRESIDENT NOMINEERtn. Kapil Chitale

IMMEDIATE PAST PRESIDENTRtn. P.N. Mohan

DIRECTOR PUBLIC IMAGEAND FUND RAISINGRtn. Nikhil Raj

TREASURER(CHARITABLE TRUST)Rtn. Rajasekar Gorantla

HONORARY SECRETARYRtn. Prabha Srinivasan

Asst. SECRETARY/BULLETIN EDITORRtn. Sandhya Sridhar

PRESIDENT ELECTRtn. Dr. Vijaya Bharathi Rangarajan

DIRECTOR CLUB ADMINISTRATIONRtn. Vikram Chesetty

DIRECTOR YOUTH SERVICERtn. M Sesha Sai

LIGHTHOUSE COMMITTEE:Editor: Rtn. Sandhya SridharIncoming editor:Rtn. Biswajit BalasubramaniamRtn. Mohan RamanRtn. Siddharth GaneriwalaRtn. Dr. Sharon Krishna RauAnn Padmavati GunashekarAnn Sowmya ArjunAnn Kamala Ramakrishnan

Send in your articles, news, write-ups to be considered for publication here on lighthouse.rcm@gmail.comBe in touch with the Lighthouse, your very own RCM magazine!

EDITED AND PUBLISHED BY:Rtn. Asst. Secretary, Rotary Club of Madras, 'Rayala Towers',2nd Mezzanine Floor, 158, Anna Salai, Chennai - 2, Ph: 28591020.Contact the editor at: lighthouse.rcm@gmail.comDesign: www.studiodescience.com

Contact club secretariat at: office@rotarymadras.in

Visit: www.rotarymadras.in

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4NOVEMBER 27, 2018

Watching out for society

RCMers Rtn. Sundaresan Ravi and Rtn. Abdul Kareem Sait attended the camp. Rtn. Soori of the Rotary Club of Chennai Central, who is also in the District Health team, came to the camp and interacted with the beneficiaries.

• No. of people for whom glasses were prescribed: 19

The Medical Camp was planned to help the beneficiaries of the centre and their families, as well as the general public.

The camp, held at the community centre hall in Rotary Nagar, saw more than 250 people attending and undergoing tests.

he Rotary Club of Madras, as a part of Tits medical initiative, had organised a Medical Camp at our Women's Empowerment Centre at Rotary Nagar, Chennai on 25th November, Sunday. At this centre, vocational training on tailoring, embroidery and digital literacy classes are conducted for the women from the local community. Tuition classes for the boys from the local community are conducted in the evening.

• Total no. of people who attended the camp: 257 [136 female members and 121 males]

Our fellow RCMer PP Dr. Arul's Uma Eye clinic and the Rotary Central Margaret Sidney Hospital medical teams pitched in to conduct the medical camp.

It is appropriate to mention here that the local community volunteers were there

throughout the duration of the camp and with their full-fledged support, the camp was conducted smoothly.

The statistics part of the camp are as follows:

• No. of people who had their eyes screened: 96

• No. patients diagnosed with cataract: 19

• No. of people who were asked to come to the hospital for further tests: 3

A medical camp at Rotary Nagar screened a good numberof beneficiaries…

MEDICAL CAMP