Govt proactive in taking feedback
Creditors have received 195% of the liquidation value of the companies which found resolution under the Insolvency and Bankruptcy Code (IBC), Dr M.S. Sahoo, chairperson, Insolvency and Bankruptcy Board of India (IBBI) said at in New Delhi on 4 May 2019.
“As of now, i.e. up to March, creditors have got 195% of the liquidation value i.e. the company has been rescued thereafter creditors have got 195% of liquidation value, if you get anything above liquidation value is actually a bonus and that has come because of IBC,” said Dr Sahoo at an ASSOCHAM National Conference on Insolvency & Bankruptcy Code.
He was responding to journalists’ questions on whether the amount of haircut being taken by the banks is a matter for concern for policymakers.
On being asked about the differentiation between financial and operational creditors, he said: “Our experience has been, up to December data which we had submitted to SC earlier, both operational and financial creditor on an average had got about 48% each of their claims.”
“In fact, financial creditor got 48.1% and operational creditor got slightly better. But now figures have changed, particularly we are waiting for resolution of Essar, because there is a huge figure which would change ratios.”
Dr Sahoo further said that as long as there is no ruling over and above the NCLAT that remains the law.
“It is heartening to note that the government has been proactive in taking feedback from stakeholders,” added Vineet Agarwal, ASSOCHAM Vice President.
“We believe the changes will support the overall governance framework and quicken resolution of NPAs,” he pointed out.
While addressing the conference, Justice M.M. Kumar, President, National Company Law Tribunal (NCLT), noted that IBC has created paradigm shifts as the borrower are no longer calling the shots, the control has grown in the hands of creditors guided by resolution professionals.
He also stressed that resolution professionals must be more equipped and a full of knowledge.
In his address, Justice S.J. Mukhopadhayay said that IBC is for present and future and so let the corporates, resolution professionals and all other stakeholders to ensure there is no ‘death’. fiinews.com
