NEW DELHI: The government is considering amending its insolvency law to prevent existing promoters of bankrupt companies from reacquiring them during the resolution process at a steep discount.
The current Insolvency and Bankruptcy Code, passed last year, does not prevent promoters from bidding for these stressed assets during the resolution process. Some owners are reported to be getting ready to stake a claim for these assets when they are put up for sale by the creditors.
But promoters wresting back control of entities after banks take a big haircut would be politically very controversial and an influential section in the government is keen to prevent this from happening.
There is some discomfort with it (the possibility of promo…
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