• Deccan Chronicle
  • Andhra Bhoomi
  • Asian Age
  • ePaper
  •  Auto Refresh
Home

ePaper
Last Updated:03:31 AM IST | Sunday, Feb 05, 2023
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Menu
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Home > Companies > Govt plans to amend IBC to ring-fence buyers of stressed assets from prosecution
Companies
Govt plans to amend IBC to ring-fence buyers of stressed assets from prosecution
By  
PTI   , Published : Nov 24, 2019, 5:28 pm IST | Updated : Nov 24, 2019, 5:28 pm IST

The move will help make the insolvency process more attractive for the bidders and instil confidence in them, sources said.

We are working out a mechanism where the resolution applicant, who through this entire court supervised process is acquiring a stressed asset as a going concern, will not be encumbered by the criminal liability relating to the company which has been caused by the previous management, an official said.
We are working out a mechanism where the resolution applicant, who through this entire court supervised process is acquiring a stressed asset as a going concern, will not be encumbered by the criminal liability relating to the company which has been caused by the previous management, an official said.

New Delhi: The government plans to amend the Insolvency and Bankruptcy Code (IBC) to provide immunity to companies taking over stressed assets from prosecution for financial crimes committed by erstwhile promoters.

This will help make the insolvency process more attractive for the bidders and instil confidence in them, sources said.

The government may move an amendment to the Insolvency and Bankruptcy Code 2016 during the current Winter Session of Parliament.

The amendment comes after several companies that are vying for assets being auctioned under IBC expressed concern regarding getting into legal trouble over the cases against previous promoters.

In many of the cases under insolvency, the promoters are under investigation by various agencies, the sources said.

"We are working out a mechanism where the resolution applicant, who through this entire court supervised process is acquiring a stressed asset as a going concern, will not be encumbered by the criminal liability relating to the company which has been caused by the previous management," an official said.

A clear direction on this will not allow occurrence of cases like Bhushan Power and Steel Ltd (BPSL).

Last month, the Enforcement Directorate (ED) had attached BPSL's land, buildings, plant and machinery in Odisha worth more than Rs 4,000 crore in a case related to alleged diversion of bank funds, delaying the resolution process under which JSW Steel was set to take over the company.

Following the development, the National Company Law Appellate Tribunal (NCLAT) asked the ED and the corporate affairs ministry to reach a consensus on the issue of attachment of assets of BPSL.

While the ED is of the opinion that it can attach the property of BPSL under the Prevention of Money Laundering Act (PMLA), the ministry has been maintaining that the agency cannot do so as proceedings under the IBC are on.

end-of
Tags: 
stressed assets, insolvency and bankruptcy code, ibc, insolvency, bankruptcy
Location: 
India, Delhi, New Delhi
Latest From Companies
HUL CMD Sanjiv Mehta said the results show that the long-term structural opportunity of FMCG in India remains intact.

HUL Q1 net profit rises 5.7 pc to Rs 1,897 crore

The management of Radar has built and exited 3 different businesses themselves which helps the sensitise first time and even veteran entrepreneurs.

Radar India advisors scales a new high

The top seven cities of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune and Bengaluru accounted for 4.45 billion km.

Delhi sees more night trips than Bengaluru, Mumbai, says Ola

Most Popular

Mukesh Ambani 9th richest on Forbes' real-time billionaires list
Top credit card myths harmful for your financial well-being
Microsoft CEO Satya Nadella tops Fortune's Businessperson of the Year 2019
Employment growth slowed down in last two years: report
GST structure: key challenges and its solutions

Editor's Picks

Income tax e-filers drop by over 6.6 lakh in FY19: Official data
Swiping on your smartphone reveals a lot about you to your social media company
  • Read Financial Chronicle as it appears in print.
  • Subscribe, and get it delivered in the inbox everyday.
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
  • Home
  • About Us
  • Contact Us
  • Terms of Service
  • Privacy Guidelines
  • Copyright © 2019 Financial Chronicle, All rights reserved
Developed & Maintained By Daksham