“The speed of resolution process has to improve so as to make the Insolvency and Bankruptcy Code (IBC) more responsive to the large number of corporate debtor cases pending,” said Dr M S Sahoo, Chairman, Insolvency and Bankruptcy Board of India (IBBI).
Delivering his keynote address at the Bangalore Chamber of Industry and Commerce (BCIC) meet on “Two years of Session on Experience Insolvency of Last 2 Years of Insolvency Resolution Process under IBC 2016 – Insights and Challenges” via video conferencing, Dr Sahoo said “The IBC has been one of the biggest reforms the country has undertaken so far and this grants the ultimate freedom to exit.”
He added “The outcome has been very encouraging so far, and the disposal has been quite quick. The IBC provides a formal market mechanism to deal with failures.”
While seeking inputs from the industry to hasten the process of case disposals, Dr. Sahoo said “Over the last two years, there has been rapid strides in the implementation of the Code. We have the entire ecosystem and regulatory framework in place now. About 1,300 corporate debtor cases have been admitted into the corporate resolution process and of these, 300 have completed the process either through liquidation or resolution.”
Dr Ashok Kumar Mishra, Member (Technical and HoD), National Company Law Tribunal (NCLT), in his address as Chief Guest pointed out that nearly 12,000 cases referred so far, nearly one-third were resolved even before the admission stage given the teeth the Code has assumed over the last 2 years.
“In many cases, a mere reference to the process has brought forward resolution which would not have otherwise been resolved in normal course. He hoped the deliberation will add value to strengthening the process and aid faster resolution,” he added.
Moderating a session on ‘The challenges and possible solutions from the journey so far’, Radhika Merwin, senior deputy editor, The Hindu Business Line said “The intent of appellate authority is to remove ambiguity and to resolve cases as early as possible. In this regard, IBC is a huge game changer. It has changed the credit behaviour of borrowers.”
Dr Ashok Kumar Mishra said “Just two years is not a representative sample for comparison or to study IBC cases. It is too early to come to any conclusion.”
Dr K S Ravichandran, managing partner KSR & Co Company Secretaries LLP said “I have seen operational creditors are the most affected in the last two years. Positive side of IBC is that all rules and regulations are to get ironed out as we move forward.”
Talking about threshold limit for accepting the cases under IBC, Dr Ravichandran said New legislation was discussed to have low threshold for case acceptance. This has affected suppliers in SMEs the worst.”
“For acceptance of any case, size of business and threshold limit should be related otherwise there could be some sort of imbalance,” argued Muhamad Yavar Dhala, managing director Forward Group of Companies.
Earlier, delivering his welcome address Kishore Alva, President-BCIC and Joint President and Executive Director, Adani – Udupi Power Corporation Ltd said “Despite the various teething issues that the IBC has encountered in its relatively short journey, the spirit and the object of the Law has been adequately demonstrated by the various cases that have been decided.”
N Venkatakrishnan, Chairman, Banking, Finance and Corporate Affairs Expert Committee, BCIC explained the theme and said “The objective of the IBC is to maximise value of assets and balancing the interests of various stakeholders. The objective is to put back the organisation onto a firm viable track so that the stigma of the past is not carried forward. From this perspective the program has involved people from the lender side, organisation which has undergone a resolution process as well as experience of Resolution Professionals. He expected the end output to be of value to the Board as well as NCLT.”
Over 50 professionals actively involved in IBC resolution mechanism, participated in the day-long session where Institute of Company Secretaries of India (ICSI) also participated at this critical event.
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