Many companies are in default due to force majeure clauses: IBBI Chief

M S Sahoo said that the average life of S&P 500 companies has reportedly reduced from 90 to 18 years over the last century

Companies are facing bigger risks today than ever before and some are on the verge of default, not because of market pressures but because of force majeure circumstances, Insolvency and Bankruptcy Board of India chairman M S Sahoo said on Thursday.

Finance Minister Nirmala Sitharaman had, in light of the Covid-19 pandemic, suspended initiation of corporate insolvency resolution processes for six months starting March 24 to stop several companies from being forced into insolvency. Many of these enterprises were on the verge of defaulting due to the invocation of force majeure. The exemption is up for review. 

Addressing an Assocham