The Chairperson of the Insolvency and Bankruptcy Board of India M.S. Sahoo on Saturday said the focus on cases coming under the Insolvency and Bankruptcy Code (IBC) should be on resolution, and not liquidation, to maximise the value of the corporate debtors.
He said the soul of the code was to keep the firm alive by balancing the interests of all stakeholders. He said this was not happening currently.
Speaking at a CII event, he said, “For that to happen, resolution value has to be higher than the liquidation value.”
Of the 850-odd cases referred to the NCLT, 130 were either in the stage of a resolution or liquidation, he said.
On the Committee of Creditors (CoC) which comprised mostly lenders, he said, it was a determining role to select suitable people in taking over a business and keep it running.
Mr. Sahoo said that regulations on non-entertainment of late bids and no negotiations with late bidders would be announced soon and would be in force with prospective effect.
Non-cooperation
K. R. Jinan, member of NCLT Kolkata bench, said that there had been instances of non-cooperation by the corporate debtors with the resolution professionals.
“Sometimes lenders refuse to finance the Resolution Professionals to see resolution is through as a going concern,” he said.
Mr. Jinan said the implementation of the code was at an initial stage.
“It has to be implemented in its true spirit. For that, periodical review is needed for successful resolution of stressed assets,” Mr. Jinan added.
