September 17, 2014
Earlier this month, United Bank of India had declared Kingfisher Airlines, its promoter Vijay Mallya and three other directors as wilful defaulter citing alleged diversion of funds
September 17, 2014
Earlier this month, United Bank of India had declared Kingfisher Airlines, its promoter Vijay Mallya and three other directors as wilful defaulter citing alleged diversion of funds
New Delhi: Sebi is working on guidelines to deal with willful defaulters but there is no restriction at present on such entities from raising funds from the capital market, according to the regulator's chief U K Sinha.
"We are working on the guidelines for willful defaulters. It will take some time," Sebi Chairman Sinha said here today.
He also said that at present, there is no restriction on willful defaulters from raising funds.
Earlier this month, United Bank of India had declared Kingfisher Airlines, its promoter Vijay Mallya and three other directors as willful defaulter citing alleged diversion of funds.
Kingfisher Airlines and directors declared as willful defaulters would not be able to borrow from banks in the future. They would also lose director-level positions in companies and criminal proceeding could be initiated against them, if warranted, to recover the money.
Meanwhile, the government is planning to come out with a separate Bill in Parliament to deal with instances of willful defaults in payment of bank loans.
Stringent action against the willful defaulters in terms of attachment of properties under Sarfaesi Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act), change in management and other legal action against the promoters, among others, are under consideration.
For preparing the Bill, the Department of Financial Services has set up a panel for suggesting changes in the existing laws to make debt recovery more effective and frame a statute with harsh penal provisions for willful defaulters.
Courtesy: PTI
