New Delhi, Jan 31 (PTI) 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 today as he asserted that liquidation is anti-thesis of resolution.
The Insolvency and Bankruptcy Code -- implemented by the IBBI -- provides for market-determined resolution in a time- bound manner.
Against the backdrop of many companies going for liquidation, Sahoo said that when a new legislation comes, there are legacy issues and backlog of problems.
In the initial 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 National Company Law Tribunal (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 dont talk about (selling)," the IBBI (Insolvency and Bankruptcy Board of India) chairperson said here.
He was speaking at an interactive session with insolvency professionals and media about the new disclosure norms put in 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 (CIRP).
The professionals have been directed to provide such details to the respective Insolvency Professional Agencies (IPAs) by today.
When asked whether the deadline could be extended, 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.
"If there is conflict of interest, if it comes to our notice, definitely we will look into it," Sahoo said.
He was responding to a query on whether the IBBI is looking into concerns that certain insolvency professionals might have been used as front entities by defaulting entities to take back a company undergoing insolvency proceedings,
Officials from the IPAs of the apex institutes of chartered accountants, cost accountants and company secretaries were present at the session.
The IBC came into force in December 2016. PTI RAM MKJ