With an aim to provide immunity to companies taking over stressed assets from prosecution for financial crimes committed by erstwhile promoters, the government is planning to amend the Insolvency and Bankruptcy Code (IBC). This will help make the insolvency process more attractive for the bidders and instil confidence in them.
The government is likely to move an amendment to the Insolvency and Bankruptcy Code 2016 during the current Winter Session of Parliament. The amendment comes after several companies that are vying for assets being auctioned under IBC expressed concern regarding getting into legal trouble over the cases against previous promoters.
In many of the cases under insolvency, the promoters are under investigation by various agencies. The Insolvency and Bankruptcy Code, 2016 is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy.