MUMBAI/KOLKATA: Debt resolution for smaller companies may see higher challenges and number of companies going for liquidation may rise once the proposed changes to the Insolvency and Bankruptcy Code (IBC) become a law, resolution professionals dealing with smaller companies said.The proposed law may prevent wilful defaulter from buying out their their own units post bankruptcy proceedings. This may lead to more liquidation as external investors in general are not very keen to bid for smaller firms which typically lack corporate governance and internal controls. "The cases which are already under debt resolution process may not see the light of the day unless they get an extended deadline. "Insolvency and Bankruptcy Board of India has brought out a welcome amendment because of which each case, big or small, is being subjected to forensic audit/ investigative audit. This will help investors to be aware of all the skeletons hiding in the closets and take informed decision," said Binani, who is an insolvency professional.

Source: Economic Times November 23, 2017 16:04 UTC