Latest news with #IBC)AmendmentBill
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Business Standard
3 days ago
- Business
- Business Standard
Best of BS Opinion: Myanmar tensions, Dubai's Malathon, and Sindoor lessons
The Insolvency and Bankruptcy Code (IBC) Amendment Bill aims to reinforce core principles while streamlining processes. By undoing the Vidarbha Industries and Rainbow Papers rulings, it restores the original insolvency trigger and prioritises secured creditors over government dues. It strengthens the 'clean slate' principle, binds all stakeholders to approved resolution plans, and safeguards existing licences. Tighter timelines for adjudicating authorities, incorporation of regulatory provisions into the Code, and new rules for creditor committees are notable steps. Yet, as M S Sahoo points out, persistent inequities — such as the gap between recoveries for financial and operational creditors — remain unaddressed, and cross-border provisions risk concentrating power with the executive. Shifting to the Northeast, political developments in Myanmar and Manipur carry significant regional implications. Myanmar's plan to hold elections in December 2025 comes even as civil war leaves border states vulnerable to Chinese influence. These tensions spill over into Mizoram, Nagaland, and Manipur, where infiltration from Myanmar is tied to ethnic strife between Meitei and Kuki-Zo groups. Measures like scrapping the Free Movement Regime and initiating border fencing may take years to complete. Resistance groups with cross-border ties remain active. As Aditi Phadnis notes, while President's rule in Manipur has reduced violence, incidents like the June 2025 protests show underlying divisions remain ahead of pivotal elections in Myanmar, India, and Bangladesh. In Dubai, coping with August heat that touches 50 degree Celsius has taken a novel turn. The 'Mallathon,' organised by the Dubai Sports Council, opens shopping malls early for walkers and joggers, creating climate-controlled fitness spaces. About 500 people participate daily, including corporate teams, with attractions like robotic humanoid races adding flair. Inspired by similar practices in colder regions abroad, the initiative, says Sandeep Goyal, has been embraced as an inclusive and practical response to extreme weather, even if some critics dismiss it as image-building. Meanwhile, Operation Sindoor has reignited debate on air force doctrines. The Pakistan Air Force traditionally focuses on fleet preservation and air-to-air combat tallies, while the Indian Air Force prioritises strategic objectives, even at higher aircraft loss rates. As Shekhar Gupta observes, the IAF's strikes on preselected targets contrasted sharply with the PAF's defensive posture, reflecting a longstanding divergence in approach. Finally, Kumar Abishek delves into the science of randomness, distinguishing it from unpredictability and highlighting its role in cryptography, simulations, and secure communications. Advances in quantum computing now allow certified randomness generation, a reminder of both technology's reach and nature's limits. Stay tuned!
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Business Standard
6 days ago
- Business
- Business Standard
IBC Bill proposed wider look-back period for preferential transactions
In order to capture a broad range of transactions, particularly those undertaken to exclude assets from the insolvency process, the Insolvency and Bankruptcy Code (IBC) Amendment Bill has amended the look-back period, which will be counted from the initiation of insolvency instead of its commencement. The Centre on Tuesday introduced the IBC Bill in the Lok Sabha, proposing a wide range of reforms from group and cross-border insolvency to creditor-initiated insolvency resolution process. The Bill has been referred by the government to a select committee. In cases where the admission of an application takes longer than 14 days, as required under the Code, the look-back period for preferential transactions may not be able to capture a significant portion of transactions that occurred before the filing of an application. The government was concerned that this could give corporate debtors a perverse incentive to delay admission of the application for commencement of the insolvency resolution process to reduce the scope of an avoidable transaction. 'The threshold for the look-back period for preferential transactions, therefore, has been adjusted to more effectively capture a broader range of pre-filing transactions, particularly those undertaken in anticipation of the commencement of the insolvency resolution process to exclude assets from the process,' the Bill stated. 'The resolution professional and liquidators should do a careful analysis so that genuine business transactions do not get counted as preferential transactions. And, everything is not pushed as avoidance or fraudulent. There are a huge number of such cases already pending in the National Company Law Tribunals (NCLTs),' said Surendra Raj, Partner, Grant Thornton Partner. Aligning with the recent regulations introduced by the Insolvency and Bankruptcy Board of India (IBBI) — allowing part resolution of assets — the Bill has also inserted a similar provision to Section 5 of the Act. It is to allow 'merger, amalgamation, demerger and sale of one or more assets of the corporate debtor.' An important clarification brought in the Bill relates to the assurance that government concessions such as licence, permit, registration and quota, by the Centre, state, local authority or sectoral regulator would continue as part of a resolution process. 'Several similar assets are languishing before the courts, suffering value erosion and being prejudicial to all stakeholders. Apart from enhancing the efficacy of IBC, this should also make these projects bankable by project financiers. This is indeed a significant step, and in absolute consonance with the stated objectives of the IBC,' Soumitra Majumdar, partner, JSA Advocates & Solicitors, said. The amendments have provided for a continued supervisory role of the committee of creditors (CoC) even during liquidation. In order to address delays on account of inter-creditor disputes, the Bill has said that the adjudicating authority may, before rejecting the resolution plan, give notice of an additional 30 days to the CoC to rectify any defects in the resolution plan. The proposed amendments enable the adjudicating authority to first approve implementation of the resolution plan. Then, by a separate order, it can approve the manner of distribution, thereby segregating the two issues.
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Business Standard
7 days ago
- Business
- Business Standard
Govt introduces IBC Amendment Bill with group, cross-border reforms
The government on Tuesday introduced the much-anticipated Insolvency and Bankruptcy Code (IBC) Amendment Bill, bringing key reforms including group insolvency, a creditor-led resolution process, and a cross-border insolvency framework. The Bill has been referred to a select committee for further deliberations. The proposed amendments include changes to Section 7 of the Code, which deals with initiation of insolvency by a financial creditor. It enables mandatory admission of an application for the corporate insolvency resolution process once the default is established, no disciplinary proceedings are pending against the proposed resolution professional, and other procedural requirements are met. 'The proposed amendments aim to reduce delays, maximise value for all stakeholders, and improve governance of all processes under the Code,' Finance Minister Nirmala Sitharaman stated in the Bill's statement of objects and reasons. She added that the proposed changes seek to modify existing provisions to better align with the overall objectives of the Code and to introduce new provisions following global best practices for resolving insolvency. Being amended for the seventh time since its inception, the IBC now proposes an out-of-court initiation mechanism for genuine business failures to facilitate faster and more cost-effective insolvency resolution with minimal business disruption, as part of a creditor-initiated resolution process. The aim is to ease the burden on judicial systems, promote ease of doing business, and improve access to credit. The group insolvency framework in the Bill seeks to efficiently resolve insolvencies involving complex corporate group structures, minimise value destruction caused by fragmented proceedings, and maximise creditor recoveries through coordinated decision-making.
