NCLT admits Go First’s insolvency petition
The National Company Law Tribunal Board (NCLT) has accepted Go First’s insolvency application. The former management will deposit ₹5 crore towards the expenses of IRP (insolvency resolution process) and the IRP will have to keep the company running as a concern.
What it implies: This will enable the moratorium to kick in, giving the airline bankruptcy protection. It means that lessors cannot seek repossession of aircraft and any other airline assets. The airline’s CEO Kaushik Khona had in an interview said that if the NCLT extends the moratorium to the airline, it will be able to resume operations within seven days.
It remains to be seen whether the airline can actually get back its aircraft to the tarmac immediately. Go First had on May 02 filed for insolvency with NCLT citing issues with Pratt & Whitney engines for its financial losses. It owes several banks dues worth over ₹ 6,000 crore.
₹9,000 crore stuck with Go First, say travel agents
The Travel Agents Association of India, which has about 2,500 members, has said in a letter to the civil aviation ministry that around ₹9,000 crore worth of dues in the form of advances and forward bookings, is stuck with Go First airline, according to a report in Business Standard.
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What it implies: More such claims are expected to surface as Go First struggles to restart its operations. The Wadias who own the airline must either find a partner or invest more in Go First to resume operations. Or else, they have to completely give up the airline.
Expert panel submits report on Adani-Hindenburg report to SC
Meanwhile, the six-member expert panel set up by the Supreme Court, following the publication of the Hindenburg report on the Adani Group, has submitted its report to the apex court.
What it implies: The expert panel’s report and its recommendations will be the benchmark for other domestic corporate sector cases. The task assigned to the panel, comprising former judges OP Bhat, JP Devdatt, Nandan Nilekani, KV Kamath, and Somasekharan Sundaresan, includes:
a. providing an overall assessment of the situation, including the relevant factors leading to the recent volatility in the securities market
b. Suggesting measures for strengthening awareness amongst investors
c. Investigating any regulatory failure in dealing with the alleged contravention of laws covering the securities market connected with the Adani Group or other companies
d. Suggesting appropriate measures for strengthening the statutory and regulatory framework and securing compliance with the existing legal framework for protecting investor interests.
Also read: Go First says it’s ready to soar again, but the odds suggest otherwise
ONDC logs slow e-comm uptake
A report in the Economic Times has said that the govt-backed e-commerce platform, Open Network for Digital Commerce, has yet to show significant traction for e-commerce orders as order returns and rejections have increased.
What it implies: While the initiative by the government needs to be lauded, the platform needs better regulation; a fool-proof system to scan dubious sellers and grievances of both the sellers and the customers addressed without any delays. However, it is still early days for the venture, and it might take at least a year before the operations stabilise.