Promoters of stressed companies mulling legal help to bid for assets under new IBC ordinance
Promoters of stressed companies like Essar Steel, Bhushan Steel and others are mulling taking help of legal experts in an effort to keep their companies under the new ordinance for amending the Insolvency and Bankruptcy Code (IBC).
On Thursday, President Ram Nath Kovind gave consent to the Ordinance, which will prevent wilful defaulters or promoters with some history of default from bidding for their own or other stressed assets at a discount.
The President’s approval comes a day after the Cabinet approved the ordinance. The ordinance will prevent misuse of IBC as the defaulters may also be prohibited from submitting a resolution plan.
Read more: Promoters with NPAs of a year or more barred from bidding in insolvency process
Many of these promoters are already in process of taking legal opinion, sources told CNBC-TV18. Since these companies are under the control of the Insolvency Resolution Professional (IRP), any legal recourse would have to be taken in the personal capacity of these promoters.
The promoters have little time to regain control of their firms as the 180-day deadline for resolution is coming to an end in January.
The new Ordinace will now be tabled in the upcoming Winter Session of the Parliament.