Photo: AFPNew Delhi: Bankrupt businesses exploring turnaround options under pressure from lenders can no longer ignore the interests of their employees, vendors and customers, which in the case of real estate firms would include homebuyers, according to the latest rule changes announced on Friday. The Insolvency and Bankruptcy Board of India, which oversees the revival and liquidation of distressed firms, amended two of its regulations to require that every turnaround scheme should also specify how the interests of these stakeholders will be taken care of. “It is an excellent move and plugs a gaping hole in the corporate insolvency resolution process,” said Sumant Batra, managing partner of law firm Kesar Dass B. If lenders convert their loans to equity, the public shareholding in such companies will be diluted. The amended rules are Insolvency Resolution Process for Corporate Persons Regulations, 2016, and Fast Track Insolvency Resolution Process for Corporate Persons Regulations, 2017, said the statement.

Source: Mint October 06, 2017 18:33 UTC