IBC ordinance not aimed at favouring any corporate house: Piyush Goyal

Corporate Affairs Minister Piyush Goyal. File Photo
Amid charges flying thick and fast over the government’s proximity with India Inc, Corporate Affairs Minister Piyush Goyal on Tuesday rejected the Opposition’s allegation that it has come out with an ordinance to amend the Insolvency and Bankruptcy Code (IBC) to favour a big corporate house.

Replying to a debate on the Insolvency and Bankruptcy Code (Second Amendment) Bill 2018 in the Lok Sabha, Goyal said the government brought the ordinance to ensure speedy resolution of stressed assets and for the benefit of homebuyers and the MSME sector.

The Bill to replace the ordinance was approved by the Lower House by a voice vote after the Opposition walked out in protest alleging that the minister had not given a proper reply to the issues raised by them.

Leader of the Congress Mallikarjun Kharge and several others alleged that the ordinance was brought to facilitate the acquisition of Alok Industries by Reliance Industries.

“People want the government to respond immediately and that is what is appreciated,” he said, adding “we want resolution and not liquidation” of ailing companies.”

Goyal said all provisions of the Bill were prospective and not retrospective to benefit any company and it was the National Company Law Tribunal (NCLT), which in its wisdom, had decided to refer back the issue of acquisition to the committee of creditors (CoC).

The minister said that he was not competent to discuss the conduct of the NCLT.

The government had come out with the ordinance to implement recommendations of a high-powered committee. The amendments propose reducing the minimum voting threshold for the CoC to 66 per cent, from the existing 75 per cent for key decisions - a provision which the Opposition said was aimed at benefiting one corporate house.

Of late, the government and the Opposition have locked horns over alleged pro-industrialist policies of the government or “suit boot kee sarkar”. 

The Bill also aims at giving relief to the home buyers by recognising their status as financial creditors, thus giving them due to representation in the CoC and making them an integral part of the decision-making process.

He added that it should be the resolution professional’s prerogative to decide whether homebuyers are financial creditors or operational. With these amendments, homebuyers will be considered creditors to the company. 

Goyal said the government would come out with regulations and evaluation matrix which will help CoC to decide on insolvency issues.

He said the code has worked effectively as a resolution is resulting in banks getting back dues. 

Is Piyush Goyal ‘caretaker’ FM?

Is Piyush Goyal the “caretaker” Finance Minister? Trinamool Congress leader Saugata Ray on Tuesday posed this question to Goyal in the Lok Sabha while participating in a debate on the Insolvency and Bankruptcy Code (Second Amendment) Bill.

"Before I start my speech, I would like to ask a question. Is Piyush Goyal a caretaker Finance Minister or a full-fledged Finance Minister," Ray said.

Goyal was present in the House when Ray made the remark.

To this, Deputy Speaker M Thambidurai remarked that Goyal has already said in his speech that Arun Jaitley is the Finance Minister.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel