Beware moral policing. Which is pretty much what the Ordinance on the amendment to the Insolvency and Bankruptcy Code (IBC) by GoI amounts to. It practically bars promoters of insolvent companies from bidding for these companies.
The preamble to the Insolvency and Bankruptcy Code (IBC) states that its objectives are to maximise the value of assets of insolvent corporate entities, promote entrepreneurship and availability of credit, and balance the interests of all stakeholders. Now, the value of an insolvent entity depreciates with time. It then faces difficulty in raising funds from banks as well as the capital market. Since there is no organised junk bond market in India to finance an insolvent company, its value is best preserved by …
Read the full article at: https://blogs.economictimes.indiatimes.com/et-commentary/unreasonably-untouchable/