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Insolvency & Bankruptcy Code: Maximization of Value of Stressed Company, not for any particular stakeholder- Dr. M S Sahoo, Chairman, IBBI
May 25, 2018
MUMBAI, 25 May 2018: Insolvency & Bankruptcy Code (IBC) seeks to provide a resolution which is beneficial for all the stakeholders, and not just the financial creditor. The law needs to be leveraged so that all stakeholders derive maximum value, said Dr. M S Sahoo, Chairman, Insolvency and Bankruptcy Board of India (IBBI) at the FICCI Conference on "Effective Resolution of Stressed Assets" held at Mumbai today.
"The Committee of Creditors needs to evaluate the options realistically to create sustainable value and not just discover a price", said Dr. Sahoo at the Conference. The objectives enshrined in the preamble and recent approval of resolution plans show that the IBC is a tool to turnaround stressed companies and not just a tool for recovery of debts, added Chairman, IBBI.
He was of the view that the IBC, like no other legislation, aims at resolving stress of the corporate entities which are facing challenging times due to obsolescence, change in the consumer pattern, etc. The aim of IBC is to seek revival of the companies than their liquidation as the companies with right management and entrepreneurship skill would be able to turn them around for the collective benefit of its stakeholders.
The recent bidding is not a commercial exercise but to explore various resolution plans which could unlock the value of enterprise such that it is a win- win situation for all the stakeholders. There is a greater need for creditors to postpone recovery and assume risk taking capabilities for harmonious and balanced approach to meet the needs of all the stakeholders.
Mr. Rashesh Shah, President, FICCI and Chairman & CEO, Edelweiss Group, speaking at the conference recognized that IBC is a landmark legislation. It has been harbinger of positive changes. IBC has shown considerable and positive alacrity in terms of constant interaction of Government with stakeholders to bring about a strong, comprehensive and robust piece of legislation which responds to the dynamics of the situation. "Reducing timelines can contain reduction in values", added Mr. Shah.
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