President nod to ordinance to amend Insolvency and Bankruptcy Code, 2016

An ordinance amending the Insolvency and Bankruptcy Code [IBC], 2016, has been passed to help prevent defaulters from bidding for their assets during resolution proceedings and regaining control. The ordinance aims to put safeguards in place by prohibiting wilful defaulters, those with loans classified as non-performing assets (NPAs) for at least a year, disqualified directors, entities barred by the capital markets regulator, and the habitually non-compliant, among others, from regaining control of the defaulting company/stressed asset through the back door. The amendment also specifies that the Committee of Creditors should ensure the viability and feasibility of the resolution plan before approving it. The Insolvency and Bankruptcy Board of India has also been given additional powers.