Sahoo emphasised that the IBBI will remain vigilant and prepared to take on the challenges and adapt to requirements of the emerging scenario. “It will strive to provide a malleable regulatory framework within the confines of the Code, build the capacity of the insolvency professionals and other constituents, and promote best practices, to take the insolvency reforms to the next level.
“In doing so, it will continue its engagement with the stakeholders to ensure that insolvency reform remains a reform by the stakeholders, for the stakeholders and of the stakeholders. This is of utmost importance to ensure that the regulations are grounded on realities,” he told. He was responding to a query on the priorites of the IBBI in the new year.
The government has taken various measures to help companies deal with business headwinds due to the pandemic disrupting economic activities. One of the steps was to suspend fresh proceedings under the IBC and the same has been extended till March this year.
“Facilitating the implementation of special insolvency framework for MSMEs (micro, small and medium enterprises), pre-pack, cross border insolvency, group insolvency, fresh start process in sync with policy developments in this regard will be on its agenda,” Sahoo said.
The IBBI chief also said the endeavour is to promote a platform for distressed assets that has four elements — marketplace for interim finance, virtual data room, invitation of resolution plans, and auction of liquidation assets, in the interest of efficient price discovery and value maximisation.
“Information asymmetry is critical to insolvency proceedings. The IBBI will be working on availability of complete and reliable information for stakeholders,” he said.
The IBC provides for a market-linked and time-bound resolution of stressed assets.
“Keeping a company resolvable is a win-win for the company, its promoters and directors and creditors. This increases the likelihood of resolution in case of need. The IBBI intends to work towards promoting resolvability of companies,” Sahoo said.
About key learnings for the institution amid the pandemic and suspension of fresh proceedings, the IBBI chief said the present health crisis has taught the whole humanity, one more time, that one needs to adapt to survive and thrive.
“The IBBI too accepted the challenge and adapted itself to the new environment.
“Moving to e-mode for most of our engagements with stakeholders; re-calibrating important regulations to facilitate stakeholders to complete various processes, and thinking ahead about actions required in the insolvency space to meet the challenges have been its priorities,” he said.