The first phase of resolutionfor the IL&FS Group are expected to happen in the next few months, Corporate Affairs Secretary Injeti Srinivas said. He added that 50% of the group’s assets had been put on the block.
“I think a lot of headway is being made,” Mr. Srinivas said on the sidelines of a CII conference on the Insolvency and Bankruptcy Code. “In the next few months, the first phase of resolution should be completed,” he added. Mr. Srinivas said that about 50% of the ailing group’s assets were already on the block and that 100 of the group companies that would need a risk-based classification would be categorised as high-risk or medium-risk companies.
The Corporate Affairs Secretary also said that the Supreme Court had clarified all grey areas pertaining to Section 29A of the Insolvency and Bankruptcy Code, which dealt with barring defaulting promoters or their relatives from bidding for assets.
The apprehension was that this would bar a successful businessperson from bidding for an asset just because of familial relations.
“The SC has endorsed 29A and one or two issues which were there. It has resolved by saying that the related parties will have to have one additional test of having a business relationship,” Mr. Srinivas said. “So, merely because two persons are brothers or relatives you can’t be disqualified unless there is a business link between the two. That was one grey area, but the Supreme Court has rectified that.”
IBC most effective
Mr. Srinivas said that the IBC was the most effective such legislation in the history of India, which was evident from the ‘impressive’ recovery rate and shortened resolution time. He said that about ₹3 lakh crore had been recovered under the IBC in the last two years.