Extended disputes hamper India’s new bankruptcy law
The successful resolution of about $210bn in stressed loans is crucial to Prime Minister Narendra Modi efforts to clean up the balance sheets of state-run banks
Mumbai/New Delhi — India’s new bankruptcy law is being bogged down by bitter courtroom disputes that include ArcelorMittal and the Tata Group, in a country famous for its sluggish legal system. None of the 12 large debtor companies that the central bank forced into bankruptcy court in June have been sold yet. The National Company Law Tribunal (NCLT) in charge of the process, has extended a 270-day deadline enshrined in the law for Bhushan Power & Steel and Essar Steel India by excluding the days under litigation. Others may follow as the courts are inundated with appeals from founders, administrators, lenders and bidders. The successful resolution of about $210bn in stressed loans is crucial to Prime Minister Narendra Modi efforts to clean up the balance sheets of state-run banks, which hold nearly 90% of impaired assets. The first 12 large cases are being closely watched to gauge whether India can hasten the pace of bad-loan recovery, which the World Bank puts at 4.3 years, ranking...
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