Insolvency and Bankruptcy Board of India (IBBI) chairperson MS Sahoo on Thursday pitched for a comprehensive and objective framework to assess the working of the insolvency law to make prompt course corrections.
Insolvency and Bankruptcy Board of India (IBBI) chairperson MS Sahoo on Thursday pitched for a comprehensive and objective framework to assess the working of the insolvency law to make prompt course corrections. Haircut figures shown in resolutions will be lesser if figures of claims, which were inflated, and realisations, which were lower, were adjusted to their real level, Sahoo said at a conference organised by CII.
In value terms, the Insolvency and Bankruptcy Code (IBC) has significantly contributed as companies accounting for 70% of the stressed assets have been rescued, he said.
Performance of IBC should be assessed in line with the objective of the code, Sahoo said. IBBI is a key institution in implementing the IBC, which provides for a market-linked and time-bound resolution of stressed assets.
“We need a framework for a comprehensive and objective assessment (of IBC)…to stay on course, assess performance…and make prompt course corrections,” Sahoo said. “Systematic and holistic assessment” was required to indicate the efficacy of the resolution process and highlight the gaps in the process, he said.
“Framework may include process evaluation by including the key evaluation aspects, i.e., whether the process design was robust, conduct and competence of the committee of creditors, competence of the insolvency professional, quality disposal by National Company Law Tribunal,” a CII statement quoted Sahoo as saying.
A tailor-made framework for an objective assessment of the working of the IBC is necessary “if we wish to move out from subjective views which are being presented as assessments”, he said.
He cautioned that the market would use the parameter of assessment convenient to it if there was no framework for scientific assessment.
The IBBI chief also called for efforts to find solutions in the market rather than “always ask for the state to find a solution for market problems”.
The IBC has undergone six amendments in less than five years.