Govt to hold wider consultation for group, cross-border insolvency rules

Subscribe to enjoy similar stories.New Delhi: The government will hold further consultations before rolling out schemes for debt resolution of all companies in a group in one go, and for dealing with cross-border insolvency cases where a company or its creditors are in different jurisdictions, two persons familiar with the development said.Introduced through legislative amendments in April, these two ambitious provisions form part of the most comprehensive overhaul of the Insolvency and Bankruptcy Code (IBC) since its enactment in 2016. The amended legislation received presidential assent on 6 April..Most provisions in the amended Code, which seek to improve the efficiency and outcomes of debt resolution of companies and their promoters, will be notified at the earliest but the schemes for group insolvency and cross-border insolvency may be rolled out only after further consultations, said the first of the two persons quoted above, both of whom spoke on the condition of anonymity.

These two new schemes are complex and add new dimensions to IBC, said this person.At present, the central government is consulting the UN on adapting its model of group and cross-border insolvency frameworks to India’s requirements and pattern of litigation seen in the past for optimum efficiency. Rules for these schemes will be notified only after they are tabled in both the houses of Parliament and will include any modification Parliament recommends, said the second person.Queries emailed to the spokesperson for corporate affairs ministry on Friday remained unanswered till press time.Experts pointed out that group insolvency regime will seek procedural coordination of debt resolution of multiple entities within the group, rather than a