Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, which received president's nod on Thursday, has literally shut out many promoters who are trying to win over their debt-ridden companies that are currently at the National Company Law Tribunal (NCLT) or in the process of insolvency. The ordinance has identified several people disqualified from submitting resolution plans for these companies. Surely, these amendments will save the government blushes in a situation where promoters seek massive haircuts from banks. There is clarity that the people who have caused the insolvency or losses to the banking system cannot be beneficiaries of the very asset that they have rendered non-performing at a reduced cost. Many analysts cite the massive bad loan pile-up and higher proportion of wilful default cases as reasons that forced the IBC amendment and weeding out of unscrupulous promoters.

Source: dna November 24, 2017 02:26 UTC