The government may consider amending the controversial Section 29A of the Insolvency and Bankruptcy Code by changing the definition of “related party”. Section 29A, in its present form, bars entities with no real link with the failed business put up for sale but are still considered as “related party” on purely technical grounds. The move also barred related parties — which was defined to include persons or firms connected to the wilful defaulters or those who have not paid their debts for one year or more. It covered persons or firms or financial institutions, linked to the holding company, subsidiary company or associate company of a defaulter. Besides, it barred persons who had offered a guarantee for loans taken by a defaulter.

Source: The Telegraph December 18, 2018 20:15 UTC