President approves bankruptcy code ordinance
President Ram Nath Kovind on Thursday approved the ordinance for amending the bankruptcy code. The amendments will make it difficult for insolvent promoters to acquire stressed companies.
This came a day after the Cabinet referred the ordinance to the President for his assent. Top sources in the government said that the ordinance makes it difficult for promoters trying to re-acquire their stressed companies, by putting stringent guidelines for an applicant to qualify. While wilful defaulters and un-discharged insolvent are disqualified, loan defaulters with NPAs for more than a year are also not eligible. Any antecedent of corporate fraud or contravention of the companies act will also disqualify a bidder for a stressed asset.