The proposed repairs include a framework for three types of bankruptcy resolutions under the IBC-creditor-leadership, cross-boundary bankruptcy and corporate group bankruptcy.
One people told ET that the changes were discussed at the June 6 meeting chaired by Prime Minister Narendra Modi’s Chief Secretary Shakti Kanta Das.
Accordingly, the ministry will soon move the cabinet note after the final approval of the proposals of Finance and Corporate Affairs Nirmala Sitharaman for the purpose of submitting the amendment to the upcoming monsoon session of Parliament, which started on July 7.
According to the latest data from the bankruptcy regulator, in about 78% of cases in progress until March, the 270-day period increased. The delay, often due to late access to the cases, causes further incense of stressed property and weighs on lender’s recovery, in addition to complicating rescue efforts. People mention that these changes are the latest from 2022, while trying to strengthen these codes. During the launch of May 2 and 2, the IBC has been amended six times to respond to the emerging challenges of solving banks. From then on, the government had discouraged from the next tinking to allow bankruptcy ecosystem.
However, JSW Steel canceled Bhushan Power and Steel’s acquisition of Rs 7, 7, 7 crore, four years ago in the planned repairs to avoid recurrence of the situation after the Supreme Court.
People noted that the Apex court had maintained the integrity and purpose of the IBC and underlined the need to comply with the prescribed legal process of all the shareholders.
However, the rules can be changed to ensure that the IBC process will be followed during the acquisition and the self will be adhered to, he said. Changes in the rules do not require parliamentary approval.
Proposed framework
Lenkar’s leadership resolution: The resolution -led resolution framework, led by Lenkar, will include a large number of out -of -court arrangements. ET has said that the National Company will reduce the burden of the work of Law Tribunal (NCLT) and to accept more responsibilities to the Leddar’s committee and speed up the stressful property resolution.
Border Bankruptcy: In the change of the previous plan, the government is now planning to present a cross-border bankruptcy framework under IBC, people said. It will be created around a model of United Nations, and the objective is to ensure easy access to the laners for foreign assets of stressed companies. With such a framework, India can get cooperation from foreign countries to bring the property of defaults there under consideration for bankruptcy proceedings.
Group bankruptcy: Due to the interaction of their operation, the interaction of their operation, will facilitate the joint resolution of the stress components of the domestic corporate group that will also present the ‘NGO’ group bankruptcy framework.
ET had earlier reported that a group of different solvent companies of a group could enable a group of various solvent companies to make the framework resolution faster and to get the maximum profit or the process to be joined independently of the process. This will only apply to the bankruptcy companies of a group and will not extend to its non -solvent organizations.
Currently, resolutions of the individual components of the group are independently followed by their respective laners.
In some cases like Videocon, ERA Infrastructure, Lanco, Education, AMTEC, El Dell, Jaipi and Aircel, the mutual connected nature of the group companies requires the right group of division.
In December last year, Ravi Mittle, chairman of the bankruptcy and bankruptcy board, had also joined the formal group for the bankruptcy box.
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