NCLAT's nod to Sterling Biotech for settlement with lenders baffles experts

A recent order of the National Company Law Appellate Tribunal (NCLAT), allowing the promoters of Sterling Biotech to enter into a one-time settlement with lenders, has surprised Insolvency and Bankruptcy Code (IBC) watchers.

They think this could open up a Pandora’s box for future IBC cases.

Legal experts say the order goes against the legislative intent of the IBC, which has set aside laws to keep errant promoters away from the resolution process. 

Sterling’s promoters Chetan Sandesara and Nitin Sandesara are absconding and face investigations from multiple agencies, including the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) and the income tax