News digest: Tweaks in IBC code, clouds over Rafale deal, and more

Tweaks in IBC code to block wilful defaulters

Wilful defaulters, dubious promoters as well as those involved in fraudulent transactions would not be able to bid for companies going insolvent, with the Centre deciding to amend the Insolvency and Bankruptcy Code.

The Cabinet approved an ordinance on Wednesday. The amendments would come in force with immediate effect (after the President promulgates it), Finance and Corporate Affairs Minister Arun Jaitley said after the meeting.

Jio & Airtel to use customer bank to challenge Paytm

Reliance Jio and Bharti Airtel are set to declare war on Paytm — king of mobile wallet business that launched its payments bank in May. The telcos are leveraging their mobile customer base and distribution network in trying to compete with Paytm.  Jio is already signing up a large number of merchants on its soon-to-be-launched payments bank.

Task force to draft new direct tax law

The government has brought back the main author of the now junked Direct Taxes Code (DTC) as a convenor of the task force to review the decades-old provisions of the Income-Tax Act and draft a replacement. The government has, however, already implemented many provisions of the draft DTC, such as the General Anti-Avoidance Rules (GAAR) and on Place of Effective Management.
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Lessons from Monarch Airlines: The PE industry is starting to look like a spent force

The recent collapse of Monarch Airlines and the potential surrender of care home group Four Seasons to creditors may well be a sign of the times for the private equity industry. The sector is known for turning round companies, slashing costs, increasing cash flow and using debt to reduce tax and mitigate risk, but the model is now looking fragile.

Top 10 equity schemes beat key indices in 2017
Private equity (PE) was in its pomp in the 1980s, and in 1990, Richard Gere provided a useful cultural reference point with his portrayal of a (temporarily) ruthless private equity partner in the blockbuster film Pretty Woman. But now, an oversupply of rival funds and investor money looking for opportunities is forcing investment in higher-risk business and the acceptance of more marginal returns. The sector buys major stakes in companies that are not publicly listed, but bigger acquisitions are costing too much partly thanks to high stock market valuations.

Just as it was for acquisitive conglomerates such as Hanson Trust that were the precursor to the PE industry, it may well be that the model has run its
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