Insolvency and Bankruptcy: Govt plans separate legislation for registered valuers
proper valuers were the critical missing link in the process since most insolvency professionals were poorly equipped since it was a new area for them.
Mumbai: The government plans to come up with a separate legislation for registered valuers who can help arrive at better valuation of bankrupt companies under the insolvency process, Corporate Affairs Secretary Injeti Srinivas said on Saturday.
Of the 40 largest NPA accounts sent to various National Company Law Tribunals (NCLTs) since last July, which together constitute around 40 percent of over Rs 11 trillion worth of bad loans, only seven had been resolved so far, where the banks took an average haircut of over 60 percent since some accounts such as Alok Industries were bid out for only 17 percent of the money owed to lenders.
Noting that the Insolvency and Bankruptcy Code (IBC) was stabilising, Srinivas said proper valuers were the critical missing link in the process since most insolvency professionals were poorly equipped since it was a new area for them.
“You have registered valuers now. But you do not have a separate law for them. We are looking at the possibility of a separate law, say for chartered accountants, or company secretaries. We are assessing whether we can have a full- fledged law to regulate them as they are most critical in the success of the insolvency process.”
At the same event organised by industry chamber CII, MS Sahoo, chairman, Insolvency and Bankruptcy Board of India, said there was a critical role for registered valuers in the whole process.
Revival of 45 bankrupt companies will meet 50% of lenders' claims: Insolvency and Bankruptcy Board chief MS Sahoo
About 1,100 companies have been admitted in the Corporate Insolvency Resolution Process (CIRP) since the implementation of the Insolvency and Bankruptcy Code (IBC) in 2016
Financial, operational creditors recover nearly half of total claims worth over Rs 1.42 lakh crore in 88 insolvency cases
The Insolvency and Bankruptcy Code (IBC) seeks to provide market-determined resolution for stressed assets in a time-bound manner
Govt is keen to introduce a globally accepted cross-border insolvency framework, which would make India an attractive investment destination for foreign creditors