New definition for industrial sickness
New Delhi: The ambit of the term 'sickness' in industries is to be widened, to include default ion payment of dues, and a 50 per cent erosion of net worth as opposed to the total net worth erosion in three consecutive years of a company, at present.

Thus any company that defaults on a debt repayment of Rs 1 lakh will be deemed to be 'sick' and considered for insolvency. The changes are being made to detect sickness much before it occurs so as to bring about a revival.

Under the existing Act, revival attempts come been made after the company has gone sick beyond the chances of any revival.

The draft bill has been circulated by the department of company affairs to various ministries, and now awaits cabinet approval for introduction.

Other changes suggested in this Bill include -- treating employees on par with secured lenders such as the government and FIs, inclusion of voluntary winding up of small companies, where only those companies with a minimum capital of Rs 10 lakh would be required to submit winding up petitions, and the winding up would have to be completed within a two year time frame.

A revival fund built up by contributing 0.1 per cent of the turnover would be set up for the rehabilitation and protection of the assets of the companies, while the multiplicity of litigation before multiple courts would be avoided by the setting up of the National Company Law Tribunal.
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Panel to review norms for top bank posts
New Delhi: THE finance ministry has set up a panel to review the norms for top bank appointments, such as that of executive directors and chairmen.

The panel ahs been set up so as to delink the Reserve Bank of India, which is also the regulatory authority over these banks, from the selection process.
The committee will look into the eligibility norms for general managers to be selected for the posts of executive directors, and executive directors for the post of chairmen.
Hitherto, when appointments had to be made for bank chairmen and executive directors, the RBI itself had to send recommendations to the Appointments Board chaired by the RBI governor.
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Godbole terms of reference not acceptable: DPC
Mumbai: US Enron promoted Dabhol Power Company (DPC) has indicated that it is not agreeable to the terms of reference presented by the Maharashtra government-appointed Godbole committee recommendations.

DPC has agreed to meet the Godbole committee, but has said that the terms that had been published were not acceptable to it. So also, it warned that its willingness to meet the Godbole committee did also not construe its willingness to renegotiate the terms of the contract.

As a part of the agreement with the Maharashtra State Electricity Board (MSEB), DPC is planning to set up a 5-million-tonne LNG facility of which only 2.1 million tonne is meant for the power project.

The Godbole panel, which has been empowered to negotiate with the DPC on behalf of the Maharashtra government, has set out terms of reference which include bringing down the tariff of the 2184-mw power project, and de-linking the LNG facility from the power plant.

There are fears that this stance of the DPC is indicative of its going ahead with its threat to terminate the project. Last week, The DPC board authorised the Enron India MD Wade Cline to serve a termination notice on MSEB as he deemed fit.
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