NEW DELHI: The Union Cabinet on Wednesday approved fresh amendments to the
Insolvency and Bankruptcy Code aimed at ring-fencing companies facing insolvency from criminal proceedings from offences committed by previous promoters of a company.
The Bill, which is expected to be introduced during the current session of Parliament, will also provide that the company facing insolvency resolution can continue as a going concern by clarifying that licenses, permits, concessions and clearances cannot be terminated or suspended or not renewed during the moratorium period.
The amendments to the Insolvency and
Bankruptcy
Code (IBC) are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease doing of business, an official release said. The IBC (Second Amendment) Bill, 2019, seeks to change various sections as well as insert a new section in the law.
“Additional thresholds introduced for financial creditors represented by an authorised representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP),” it added. This provision is aimed at restricting a single home buyer or debenture holder from seeking to initiate insolvency.
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