Will ensure regulations are 'grounded on realities': IBBI chairman Sahoo

M S Sahoo, chairman, Insolvency and Bankruptcy Board of India (IBBI)

Emphasising that the insolvency law provides a new lifeline to save a company from premature closure, IBBI Chairperson M S Sahoo has said the board will continue with efforts to develop best practices and ensure that regulations are "grounded on realities".

More than three years after implementation of the Insolvency and Bankruptcy Code (IBC), which has brought in "significant behavioural changes among the stakeholders," he said there are early evidences of the Code delivering better outcomes than the erstwhile similar frameworks.

The Insolvency and Bankruptcy Board of India (IBBI) is a key institution in the insolvency ecosystem. The Code provides for time-bound and market-linked Corporate Insolvency Resolution Process (CIRP).

The Code has undergone various amendments and the recent Supreme Court verdict in Essar Steel case has provided clarity about various aspects, including the roles of resolution professional, resolution applicant and Committee of Creditors (CoC).

When asked about the key takeaways of three years, Sahoo said the Code has re-defined the debtor-creditor relationship and brought in significant behavioural changes among the stakeholders.

"The life of a company is as precious as that of an individual. The Code provides a new lifeline to save the company from premature closure. It is the duty of the insolvency ecosystem and the stakeholders, particularly creditors, to save every company, wherever there is economic value," he told PTI in a recent interview.

As many as 10,860 cases under the Code were pending before the National Company Law Tribunal at the end of September 2019, as per data provided by the corporate affairs ministry to the Rajya Sabha.

About the priorities of the IBBI, Sahoo said the regulator would continue its engagement with the stakeholders to ensure that insolvency reform remains a reform by, for and of the stakeholders.

"It will continue to engage with academia, industry, professionals and other stakeholders to create awareness about it, build their capacity to use the Code for insolvency resolution and liquidation, develop best practices, promote research, and to ensure that the regulations are grounded on realities," he noted.

Further, Sahoo said the IBBI would keep a close watch on the developments and take note of lessons.

"It would modify the regulatory framework to address the challenges and to plug the loopholes, if any, within the confines of the Code, and build the capacity of the IPs (Insolvency Professionals) and other constituents to take the insolvency reforms to the next level," he added.



Dear Reader,


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.

Digital Editor

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