Insolvency ordinance: SME promoters may get leeway

The government move is driven by the realisation that SMEs are usually promoter-driven and attract resolution mainly from the promoters themselves

Promoters of small and medium enterprises (SME) may be allowed to bid for their insolvent companies. 

This is likely to be achieved by exempting them from the Ordinance on the Insolvency and Bankruptcy Code (IBC). 

The government in a recent Ordinance barred promoters with non-performing assets of more than one year, wilful defaulters and anyone associated with them from submitting resolution plans during insolvency proceedings.

According to the definition provided by the micro, small and medium enterprises ministry, a small manufacturing enterprise is one whose investment in plant and machinery is between Rs 25 lakh and Rs 5 crore.  

An official in the