CHENNAI: The Madras High Court on Tuesday issued a notice to the Central government to respond to a plea on the rising number of corporate establishments defaulting on payments increasing the Non-Performing Assets (NPA) norms.
Siddarth Govind, an advocate, submitted that “...the problem plaguing the system seems to be promoter and holding companies setting up subsidiaries with little or negligible net worth to take loans and thereafter once the default occurs, the promoter and holding company much-abused responsibility by taking recourse to much abused limited liability concept in company law.” Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy ordered notice to the central government to file a detailed report in four weeks.