Govt forms panel to stop promoters from bidding for defaulting companies
The government has set up an insolvency law committee to bar promoters from bidding for their stressed assets by suggesting further changes to the Insolvency and Bankruptcy Code (IBC), according to a report on CNBC-TV18.
The high-level panel will make suggestions to restrict the ability of promoters to bid for their own companies, which are going through insolvency proceedings, in order to avoid fraud.
The tightening of the existing law becomes significant as several cases under the National Company law Tribunal (NCLT) will come up for resolution in the period of February-March. The government had given directions for formation of the committee last week.
The impending urgency might lead to the government introducing the amendments by passing an ordinance.
Department of Economic Affairs officials, though not directly connected to the matter, told CNBC-TV18 that the changes in the IBC law was on top of the government’s agenda.
In a parallel move, the government has also set up a panel headed by the MCA chairman Srinivasan, IBBI chairman MS Sahoo and 14 other members including industry representatives.
They are supposed to give recommendations within two months regarding introduction of changes to the current law as well as to enhance its efficacy in terms of implementation.