Some clarifications are expected on promoter ineligibility once the ordinance of Insolvency and Bankruptcy Code (IBC) becomes a law, an expert said on Tuesday.
The IBC ordinance has been interpreted as the government's move to prevent unscrupulous and undesirable persons from bidding for companies in insolvency.
"By the time, the actual bill will be tabled in parliament, I do expect there will be some clarifications to smoothen out any unintended consequences," Cyril Shroff, Managing Partner at Cyril Amarchand Mangaldas told BTVi in an interview.
According to him, as the ordinance is being understood, one should expect there would be clarifications in terms of interpretation of the ordinance but it is unlikely that there would be complete change in terms of the intent.
He said it was done in a bit of a rush as per the ordinance but the government was getting feedback.
Asked about the ineligibility criteria as prescribed by ordinance disqualifying many major companies to bid for, he said: "...there may be sort of grey area...and it will require consideration."
Mangaldas also said the process of loan recovery would move forward. "I do not expect the sort of ambiguity that has been caused by this to slow it down...in theory, the promoters could have last chance before the resolution plan is finalised."
--IANS
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