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Cabinet okays changes to insolvency and bankruptcy code to block defaulters

Changes to help prevent wilful defaulters from bidding for stressed assets

Press Trust of India  |  New Delhi 

Arun Jaitley, Ravi Shankar Prasad
Arun Jaitley with Ravi Shankar Prasad. Photo: Dalip Kumar

The government will come out with an ordinance to make certain amendments to the and Bankruptcy Code, Minister of Finance and Corporate Affairs Arun Jaitley said on Wednesday. The Code, which became operational in December last year, provides for a market-determined and time-bound resolution process.

It is implemented by the corporate affairs ministry. The Cabinet approved bringing in an ordinance to make "some changes" in the Code, Jaitley told reporters. Details about the proposed changes could not be immediately ascertained. The move also comes at a time when there are concerns in certain quarters about various aspects of the law, including the possibility of promoters wresting back control of a company under the process. The ministry has already set up a 14-member committee to identify and suggest ways to address issues faced in implementation of the law. The Law Committee, chaired by Corporate Affairs Secretary Injeti Srinivas, will take stock of the implementation of the Code. More than 300 cases have been admitted for resolution under the Code by the National Company Law Tribunal (NCLT). A case is taken up for resolution under the Code only after receiving approval of the NCLT for the same.

First Published: Wed, November 22 2017. 13:42 IST