Over 9,600 cases worth Rs 3.75 trn disposed of at IBC pre-admission stage

More than 9,600 cases involving a total amount of nearly Rs 3.75 trillion have been disposed of at the pre-admission stage of the insolvency law process, according to the government.
The Insolvency and Bankruptcy Code (IBC), which came into force in 2016, provides for resolution of stressed assets in market-linked and time-bound manner.
As many as 21,136 applications have been filed under the Code, the corporate affairs ministry said in a release on Sunday.
"9,653 cases involving a total amount of approx. Rs 3,74,931.30 crore have been disposed of at pre-admission stage of IBC," it said.
About 2,838 cases were admitted into the corporate insolvency resolution process (CIRP) and out of them, 306 cases have been closed "by appeal/review/withdrawn", according to the release.
Further, the ministry said that in the 161 resolved cases, the realisable amount is Rs 1,56,814 crore.

Govt clears 7 amendments to IBC, extends Finance Commission's term

The government Wednesday cleared seven amendments to the insolvency law, seeking to speed up resolution and fix loopholes.
The Cabinet has approved the changes to the Insolvency and Bankruptcy Code (IBC). The amendments would "enable the government to ensure maximisation of value of a corporate debtor as a going concern while simultaneously adhering to strict timelines," an official release said.

The Cabinet extended the 15th Finance Commission's term by a month till November 30, and broadened the ambit of its recommendation to include funds for defence and internal security.

Objective of IBC is resolution, not liquidation, says IBBI chief MS Sahoo

The lop-sided ratio between liquidation and resolution under the Insolvency and Bankruptcy Code (IBC) is not alarming.
Speaking at a Confederation of Indian Industry (CII) event on IBC, M S Sahoo, chairperson, Insolvency and Bankruptcy Board of India (IBBI), said around 818 corporate debtors had been admitted to the resolution process, of which 130 had been completed.

Of the 130 cases, around 100 were probably liquidated. Sahoo asked if it was unusual, or a cause for concern.
But he explained that from the data available for 87 companies, 79 of them were either in the Board for Industrial and Financial Reconstruction (BIFR), or were not going concerns.
Sahoo cited this as the reason the process should be started early when the company is in the pink of health. "We should look at what is there is in the ground and not in the air,” he said.
Sahoo pointed out that the focus was to achieve resolution in the corporate insolvency resolution process. “Resolution plan is not just a bidding mechanism or price discovery mechanism...our focus is on resolution. The objective is to keep the firm alive, to maximise the value of the asset and balance the interests of all stakeholders. It is definitely not liquidation,” he said.
He also said the IBC was like a behavioural law, as many companies were now closing cases before the adjudicating authority. On the latest Ordinance promulgated on June 6, Sahoo said that as soon as the ordinance came, the thought process was how to operationalise it.