The Board (IBBI) is seeking public views till September 17, on the same.
Among other things, a code of conduct has been introduced for the Committee of Creditors (CoC). The 31-point code of conduct requires creditors to disclose any conflict of interest, maintain full confidentiality and not try to adjust funds of the corporate debtor against their dues during the resolution process. However, it does not mention how violations in the code will be addressed.
“The proposed changes to IBC regulations pertaining to both resolution and liquidation are timely and intend to plug the loopholes, which are affecting the timelines and value-maximisation. The measures also aim to bring in greater accountability and transparency in the conduct of key stakeholders driving the process,” said UV Asset Reconstruction Company director Hari Hara Mishra to TOI.
The proposed amendments include capping revisions on bids to two times, banning unsolicited bids and empowering the CoC to decide on the timeframe and thresholds for improvement on the resolution plan in advance.
A separate paper on the liquidation process, the board has proposed that more powers should be given to the stakeholder’s consultative committee. Besides, the board plans to ban liquidators from appointing commission agents in the sale of assets. The changes come even as the government is proposing to amend the Act by introducing a pre-packaged insolvency resolution (PIRP) for small businesses.
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