By BW CFO World Online Bureau
The insolvency board introduces major changes to increase transparency in the liquidation process.
Major changes have been proposed in the insolvency process by the Insolvency and Bankruptcy Board of India (IBBI). These changes are focused on increasing transparency and also addressing the issues being raised.
Moreover, a code of conduct has been announced for the Committee of Creditors (CoC). The code of conduct has 31 points which list out that the creditors have to disclose any conflict of interest, maintain full confidentiality and try not to adjust funds of the corporate debtors against their dues. It does not address what will be the penalties.
“The proposed changes to the IBC regulations pertaining to both resolutions and liquidations are timely and intend to plug out the loopholes, which are affecting the timelines and value maximization,” said UV asset reconstruction company director Hari Hara Mishra to TOI.
The new amendments that were put forward include up to two times revision of the bids, banning unsolicited bids and empowering the CoC to decide on the timeframe and thresholds for improvement.
A separate paper on the liquidation process said the board has given more power to the stakeholder’s consultative committee. In addition, the board plans to ban liquidators from appointing commission agents in the sale of assets. The changes are still flowing even as the government is proposing to change the act by introducing a pre-packaged insolvency resolution for small businesses.