Seeking enhanced transparency in corporate resolution, Ravi Mital, Chairperson, of the Insolvency and Bankruptcy Board of India (IBBI), today said the entire valuation of an entity that is under resolution should be put in the public domain. The insolvency regulator is working on steps to put this into practice.
There is an expectation that bidding in the resolution process should happen fast because if that is delayed some of the assumptions for bidding may go bad. So there is a need for transparency and to increase the speed of the process, Mital said. He joined proceedings of the National Summit on Insolvency & Bankruptcy Code and Valuation over the web organised by The Associated Chambers of Commerce and Industry of India.
The sustained torment in terms of old obligations and litigations one has to go through even after taking possession is a challenge facing the resolution process. He batted for a clean slate in terms of possession of assets to ensure the credibility of the process.
It is difficult for one resolution professional to maintain a big corporate entity or unit under resolution as a going concern.
Insolvency professional entities (IPEs) can help in managing such enterprises and protect value, Mital added.
IBBI has amended regulation to allow IPEs to register themselves as insolvency professionals and perform all their functions, including managing the operations of a company undergoing insolvency proceedings.
Meanwhile, ASSOCHAM and professional advisory outfit Ernst & Young in a joint report made recommendations for changes in regulations and rules to improve the environment of resolution. Key suggestions include the Enforcement of a specific time frame that the law prescribes for admission of the Corporate Insolvency Resolution Process (CIRP) (14 days currently as per the Code).
Routine matters such as CIRP extension (up to 270 days) and confirmation of IRP as RP, which can take up valuable judicial time, can be within the domain of the Committee of Creditors (CoC). Certain NCLT Benches can be designated to exclusively take up The Insolvency and Bankruptcy Code (IBC) matters. report advised.