Liquidation isn’t resolution: IBBI
New Delhi, Jan. 31: Insolvency resolution process seeks to ensure that a company exists and the intention is not to sell it in pieces, IBBI chairperson M. S. Sahoo said on Wednesday as he asserted that liquidation is antithesis of resolution.
The Insolvency and Bankruptcy Code — implemented by the IBBI — provides for marketdetermined resolution in a time- bound manner.
Against the backdrop of many companies going for liquidation, Mr Sahoo said that when a new legislation comes, there are legacy issues and backlog of problems.
In the early days of IBC it is not surprising for many companies going into liquidation, he said, adding that going forward, there would be cases of companies having “enough enterprise value, which will be an incentive for the committee of creditors to preserve”.
So far, more than 500 cases have been admitted by the NCLT for resolution under the Code. “When we are trying that the company should exist, the intention is not to sell it in pieces... Liquidation is anti thesis of resolution. When you talk about resolution, you don’t talk about ( selling),” the IBBI chairperson said here.
He was speaking at an interactive session with insolvency professionals and media about the new disclosure norms put in
If there is conflict of interest, if it comes to our notice, definitely we will look into it — M. S. SAHOO Chairperson, Insolvency and Bankruptcy Board of India
place for insolvency professionals. The disclosure norms require these professionals to disclose their relationship, if any, with each stakeholder pertaining to a case under Corporate Insolvency Resolution Process.
The professionals have been directed to provide such details to the respective Insolvency Professional Agencies ( IPAs) by Wednesday.
When asked whether the deadline could be extended, Mr Sahoo replied in the negative.
Without elaborating, he also said that there would be “consequences” in case an insolvency professional does not provide the required details within the deadline.