Bankruptcy Code may get stringent with ordinance
According to a news report, amidst a rising number of insolvency cases to make the current framework stringent, the government will soon promulgate an ordinance to amend the Insolvency and Bankruptcy Code.
Corporate Affairs Minister Arun Jaitley said that the Cabinet has approved bringing in an ordinance to make "some changes" in the Code.
The Code, which became operational in December last year, provides a market-determined and time-bound insolvency resolution process. Over 300 cases have already been approved by the National Company Law Tribunal (NCLT) to be taken up under the law, implemented by the Corporate Affairs Ministry.
The proposal came at a time when there are concerns in certain quarters about various aspects of the Code which include the possibility of promoters wresting back control of a company under the insolvency process.
The ordinance may also disqualify a promoter who has a non-performing asset for one year from bidding.
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