Insolvency and Bankruptcy Code has saved 160 companies from premature death, and its implementation will help push economic growth higher by a few percentage points.
That's according to MS Sahoo, chairperson of the Insolvency and Bankruptcy Board of India, who said companies resolved under IBC fetched "210 percent of their liquidation value". “If the companies were liquidated, they would have got at best 100 percent, the additional 110 percent is a bonus,” he added.
"Of the 160 companies that have been resolved, one-third of them were defunct or under BIFR (Board for Industrial and Financial Reconstruction), and balance two-third were in distress which, if not attended, would have gone to closure. This code enabled to save these 160 companies from premature death," Sahoo told the Press Trust of India on Monday.
According to him, IBC's implementation with all its features would push up India's growth rate by a few percentage points.
As many as 21,136 applications have been filed under the code. About 9,653 cases involving a total amount of Rs 3.75 lakh crore have been disposed of at pre-admission stage of IBC, the government said on Sunday.
About 2,838 cases were admitted into the corporate insolvency resolution process and out of them, 306 cases have been closed "by appeal/review/withdrawn", it had said. Following the implementation, several markets, including those for insolvency professionals and registered valuers, have developed.
"Even scope of professionals like advocates, chartered accountants have increased. There is a huge market for capacity building...," Sahoo said on the sidelines of a conference on Insolvency and Bankruptcy Code, 2016: Impact on Markets and the Economy.
The conference was organised by IBBI and Vidhi Centre for Legal Policy, in partnership with the Faculty of Law and the Commercial Law Centre, Harris Manchester College at the University of Oxford.
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