Govt plans to amend IBC to provide immunity to buyers of stressed assets from prosecution
PrintListen to this Article
This will help make the insolvency process more attractive for the bidders and instil confidence in them, sources said.
The government may move an amendment to the Insolvency and Bankruptcy Code 2016 during the current Winter Session of Parliament.
The amendment comes after several companies that are vying for assets being auctioned under IBC expressed concern regarding getting into legal trouble over the cases against previous promoters.
In many of the cases under insolvency, the promoters are under investigation by various agencies, the sources said.
"We are working out a mechanism where the resolution applicant, who through this entire court supervised process is acquiring a stressed asset as a going concern, will not be encumbered by the criminal liability relating to the company which has been caused by the previous management," an official said.
A clear direction on this will not allow occurrence of cases like Bhushan Power and Steel Ltd (BPSL).
Last month, the Enforcement Directorate (ED) had attached BPSL's land, buildings, plant and machinery in Odisha worth more than Rs 4,000 crore in a case related to alleged diversion of bank funds, delaying the resolution process under which JSW Steel was set to take over the company.
Following the development, the National Company Law Appellate Tribunal (NCLAT) asked the ED and the corporate affairs ministry to reach a consensus on the issue of attachment of assets of BPSL.
While the ED is of the opinion that it can attach the property of BPSL under the Prevention of Money Laundering Act (PMLA), the ministry has been maintaining that the agency cannot do so as proceedings under the IBC are on. #casansaar (Source - PTI, Business Today)
Category : Insolvent Professional | Comments : 0 | Hits : 627
The National Company Law Tribunal (NCLT) on Monday ordered insolvency proceedings against media baron Subhash Chandra on a plea filed by Indiabulls Housing Finance. A two-member Delhi bench of the NCLT directed initiation of personal insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL) Chairman Emeritus Chandra, who was a guarantor for a loan given to Essel group firm Vivek Infracon Ltd. The NCLT bench, consisting members Ashok K Bhardwaj and Subrata K Das,...
The Insolvency and Bankruptcy Board of India (IBBI) invites suggestions/comments from public and regulated entities, on the Regulations for simplifying, easing and reducing cost of compliance. The suggestions are invited in pursuance of the announcement made in the Union Budget for FY 2023-24 by the Union Finance Minister: “To simplify, ease and reduce cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For th...
To make surety bond business more attractive, the government is looking at making relevant changes in the Insolvency and Bankruptcy Code (IBC) to consider insurers as financial creditor in case of default of infra projects. The surety bond issued by a general insurance company is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee). The surety is a company that provides the fina...
The National Company Law Tribunal Delhi recently observed that the Insolvency and Bankruptcy Code cannot be used as a recovery tool. “We are of the view that in the present case the applicants are already having demands drafts of amount exceeding the defaulted amount in this petition and moreover IBC cannot be used as a tool for recovery; the settlement has been arrived between the parties. The amount has been paid in excess of the default amount and Ld. Counsel for the applicant has al...
India’s turbulent aviation sector will likely see another player go belly up with Go First of the Wadias filing for voluntary insolvency before the National Company Law Tribunal (NCLT). The budget carrier said it is cancelling all flights on May 3, 4, and 5 and will refund the full fares to the passengers. The Directorate General of Civil Aviation (DGCA) has questioned the cancellation and issued a show-cause to the airline. Go First has been asked to submit its response within 24 ho...
Comments