Bank promoters' backdoor entry worry on bankruptcy

Edelweiss protest at Synergies Dooray resolution order highlights new worry at large haircuts if promoters get to turn the rules their way

Bankers are taking a keen interest in how the Synergies Dooray Automative resolution case unfolds. For, this could create a precedent for the next set of cases at insolvency proceedings and decide how successful the resolution story turns out to be for lenders.

The central issue in the resolution process is how much of a haircut (write-off) banks will have to take. There can be no one rule for all and depending on the case, this could be as low as 30 per cent or as high as 80 per cent. However, in the Synergies Dooray case, the haircut was