More on the asymmetry that rules India’s business insolvency process

Since October last year, Scroll has been (intermittently) reporting on how India’s insolvency proceedings are coming along. Cumulatively, these reports flag a couple of peculiar patterns.

A lot of companies are up for sale — In a country with 7500 companies with a topline over Rs 250 crore, 2511 companies are slated for insolvency proceedings. There are very few buyers. Ergo, companies are changing hands at very low rates, creating in effect a giant fire-sale of Indian companies. This asymmetry between buyers and sellers is interesting. Even as most debt-saddled companies find themselves in insolvency courts, others (a very small set) continue on an acquisition spree.

An example here is Adani Enterprises. One of the most debt-saddled companies in the country, it continues to acquire companies and announce new projects with gusto. One answer why lies in today’s report.

Do please take a look.

Is a monopoly taking shape in India’s port sector?

The mood in the Odisha port town of Paradip is turning grey.
Ever since the Adani group bought the neighbouring port of Dhamra last May, people and companies dependent on the port are worried Paradip is being weakened to favour Dhamra. “I handle 70% of the cargo at Paradip. I have 1,000 employees,” said a senior official in Orissa Stevedores, a company which assists with the loading and unloading of cargo from ships. “We will have to shut down if anything happens to Paradip.”
The fears are located not merely in the proximity Gautam Adani, the Chairman of the Adani Group of companies, is alleged to have to Prime Minister Narendra Modi. A clutch of developments in recent months have contributed to them.

the expert non-appraisal committee

Monday’s order by the Gujarat High Court directing 12 units in the Mundra SEZ of the Adani Group to temporarily stop operations till the SEZ receives an environmental clearance is yet another indictment of the environment and forest ministry. The order, besides hauling up the Adani Group for allotting land to companies even before obtaining an environmental clearance for its SEZ complex at Mundra, highlights the ministry’s poor scrutiny of the project.

the rot in india’s environmental governance continues to astound.

the latest update on l’affaire adani ports, moef and sunita narain…

Adani Ports and SEZ has challenged the environment ministry’s decision to impose penalties on it for environmental violations, setting the stage for a faceoff between the government and the company, possibly even a legal battle. In a letter to the ministry dated October 14, a copy of which has been viewed by ET, APSEZ has challenged each of the seven penalties, saying the conditions have been either complied with or are not applicable to the company. The ministry had derived these penalties from the report of a committee, headed by environmentalist Sunita Narain, set up to probe persistent complaints of environmental violations at the Adani port, power plant and SEZ complex at Mundra in Gujarat. The report, submitted in April, found that APSEZ had committed serious environmental violations.

For context, see these stories. On the penalties, and why they were so bloody problematic. And, on the group itself.

in which the environment ministry decides to ignore its own laws…

By slapping a Rs 200-crore penalty on the Adani Group for environmental violations, the ministry of environment and forests may be breaking its own laws, say environmental lawyers. According to Delhi-based environmental lawyer Ritwick Dutta, the two laws that define the penal framework for such violations — the Environment Protection Act (EPA) and the Environment Impact Assessment (EIA) — don’t give the ministry the powers to levy a fine. “They empower the ministry to start criminal prosecution in a court and to cancel an environmental clearance,” he says. “There is nothing in the laws giving the ministry any power to levy such a penalty.”

one of the defining traits of the upa regime has been its opportunistic relationship with the rule of law. this story, out today, again highlights that tendency.