A bill was introduced in the Lok Sabha on Thursday seeking to amend the Insolvency and Bankruptcy Code (IBC) to plug potential loopholes and prohibit "certain persons", such as wilful defaulters, from submitting resolution plans to let them take charge of the company.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2017 was introduced by Finance Minister Arun Jaitley.
It sought to replace an ordinance promulgated earlier.
The IBC, being implemented by the Corporate Affairs Ministry, became operational in December 2016 and provides for a time-bound insolvency resolution process.
The changes proposed are expected to help streamline the process of selecting buyers for stressed assets.
For instance, currently, the Code does not specify the type of buyers who can bid for stressed assets of companies that are undergoing bankruptcy proceedings.
The bill sought to facilitate phased implementation of the provisions of the code to incorporate persons, individuals and partnership firms.
It also sought to provide clarity as to the persons who could submit a resolution plan in response to an invitation made by the resolution professional.
Certain people prohibited from submitting the resolution plan include wilful defaulters, disqualified directors, promoters or management of the defaulting company or any person who has committed these activities abroad.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.