economy

Ministry proposes amendments to IBC

Ministry proposes amendments to IBC

The ministry of corporate affairs on Thursday proposed amendments to the Insolvency and Bankruptcy Code (IBC) to expedite the rescue of distressed companies ending up in bankruptcy tribunals. In a consultation paper, it suggested ways for faster admission of cases in tribunals for initiation of the bankruptcy process and for faster adoption of the revival plans stitched together by the stakeholders. The ministry has given time till 13 January for receiving suggestions on the proposals. Mint had reported on Monday that the government plans to hold a second round of public consultation starting this week to finalize amendments to the IBC after concluding the first round on 15 December. One of the suggestions made by the government on Thursday is to amend IBC to provide “a fixed time period for approval or rejection of a corporate turnaround plan by the tribunal. The idea is to give tribunals 30 days to approve or reject a submitted resolution plan. If the revival plan is not approved or rejected within this time, the tribunal must record reasons in writing for the same. This timeline will be subject to the overall time of 330 days specified in the IBC for bankruptcy resolution. The proposals also include suggestions for quicker admission of cases by tribunals. “Delays in admission are value destructive and hinder the chances of a successful resolution, the ministry said in the consultation paper. Download.

economy 2021-12-24 Livemint