The government and the Insolvency & Bankruptcy Board of India want to invoke certain sections against companies, which have decided to withdraw their offers to buy out stressed companies through the resolution process and derailing the complete process, says a Times of India report.

The publication mentioned that apart from invoking section 74 of the Insolvency and Bankruptcy Code (IBC), which provides for a jail term, the Centre may slap a maximum Rs 1 crore penalty on entities like Liberty House and Adani Wilmer which have backed out from their earlier commitments to take over stressed assets.

Earlier this week reports surfaced that Adani Wilmar pulled out of a deal to buy bankruptcy-bound Ruchi Soya after the committee of creditors backed it. Besides, Liberty House withdrew from the resolution process of Adhunik Metaliks and Amtek Auto, citing multiple issues.

In August, Adani Wilmar — a joint venture between infrastructure conglomerate Adani Group and Singapore’s Wilmar International — was declared as the highest bidder to acquire Ruchi Soya. It wrote to resolution professional and the creditors mentioning that it is withdrawing its Rs 5,474-crore offer for the debt-laden edible oil company as the delays in closing the process are leading to “asset deterioration” and is “detrimental to the interest of the stakeholders”. 

The daily quoting unidentified sources as saying that many crucial resolution plans have been badly affected because UK-based Liberty House failed to honour its commitment for two insolvent companies — Amtek Auto and Adhunik Metaliks.

Last week, Liberty House’s Sanjeev Gupta, in an interview to a television channel, mentioned that he was eager to see the Adhunik Metaliks deal to materialise, emphasising that Liberty House was interested in a clean asset with no claims. The TV channel quoted him to say that he had concerns over resolution process of Amtek Auto, including the valuation report.

The report also stated that the Centre is interested in resolving anomalies in the IBC implementation procedure and is seeking to expedite cases to ensure that the maximum permissible time limit is maintained. #casansaar (Source - Times of India)