The government will examine suggestions to let shareholders of large defaulters retain control of the businesses while exploring fresh investments and corporate restructuring with its lenders outside bankruptcy tribunals, in a major change to the Insolvency and Bankruptcy Code (IBC).
The ministry of corporate affairs insolvency law committee, comprising officials and independent experts, will examine this proposal in detail, said a person familiar with discussions in the government.
If accepted, this will be a major shift from the current practice of shareholders of defaulting companies ceding management control to an administrator appointed by a committee of creditors. The proposal to let the existing management retain control con…
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