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Jaypee homebuyers' voting issue resolved with electoral college at 10K: IBBI Chief
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IANS | 08 Oct, 2018
Allaying fears of more than 25,000 homebuyers, Insolvency and Bankruptcy
Board of India (IBBI) Chairperson M.S. Sahoo has said all voting
related obstacles in Japyee Infratech's resolution have been removed.
"We
have addressed the voting issue... it appears to me that not all 25,000
people have joined the Committee of Creditors (CoC); only 10,000 have
joined. You have to count voting for 10,000 only. The Electoral College
is 10,000," Sahoo told IANS in an interview.
Though the amended
Insolvency and Bankruptcy Code (IBC) treats homebuyers as financial
creditors and thus a part of the CoC that takes all crucial decisions,
including deciding the new owner for crisis-hit Jaypee Infratech, the
law mandated that those who abstained from voting will be treated as a
negative vote.
Homebuyers, who have a claim of about Rs 16,000
crore, or 62.3 per cent in the overall claims of about Rs 26,000 crore
on the real estate developer, are apprehensive that the clause on
negative vote will make it impossible to meet the requirement of 66 per
cent affirmative votes for any resolution, as many have not filed their
claims.
Several thousand homebuyers have not cared to file their
claims for various reasons, including low stakes, suspect ownership or
bought from undisclosed resources, and their votes can be taken as
negative votes for any resolution.
"You must have gone through a
process to form the CoC. Have all 25,000 come, I am told 'No'. Only
10,000 have come, they have the voting rights, others don't... A person,
who is not a member of the CoC, cannot be regarded as one who has voted
against a resolution plan or abstained from voting," Saboo said, citing
a circular of September 14.
Further, Sahoo said homebuyers were
not being called from all over the country to assemble in a hall on a
particular date to cast their vote but have been asked for their views
through online voting.
As for the concern related to the voting
line being open for a very short period with a short notice, he said,
"Voting line is available for 12 hours and the notice period is 24
hours. This is the least (as per rules). The committee of creditors can
decide longer time (intervals for both the notice period and voting
window).
"Further, this (24 hours) is just for the announcement
of voting hours, but not for the agenda, which has been sent much
earlier. This way all 100 per cent of registered homebuyers can vote,"
he said.
On the resolution processes getting delayed due to
frivolous cases filed in various courts, including the bankruptcy court,
Sahoo said: "I have no view on this; it is for the courts to take the
view whether they would entertain a matter or not. When a new law has
come in, people need clarity. For the first time, things are happening.
He
said in America and other countries, it took 10 to 15 years for things
to settle down. "So you have to allow (time), somebody has to decide
these matters. You should see how many issues have been sorted out. Once
sorted out, the problem does not arise. People should have (the) right
to move the court," he added
"Our effort is to put everything
into timelines. The timelines for CIRP (Corporate Insolvency Resolution
Process) regulation were specified on July 4, 2018. For each activity,
now there is a timeline. You will have to allow six months to see how it
is working," he said.
Though IBC is not a recovery law, Sahoo
said if things go on forever, one should move towards liquidation.
"Don't keep on lingering something. This is timebound, let's do it in
timebound (manner), let's conclude it and if you think it cannot be
done, then move on in life (go for liquidation)," he said.
On
cross-border issues, he said the discussion paper has been broadly
endorsed by the Insolvency Law Committee and once it submits the report,
the government will take a call. It will be similar to the
international cross-border rules laid out in United Nations Commission
on International Trade Law (UNCITRAL).
"We are making some minor
modifications here and there but within its (UNCITRAL) wider framework.
We are adopting UNCITRAL so that it becomes a multi-lateral
understanding. About 40 countries are already a party to this," he said.
He said there was no development in framing group insolvency norms.
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