New Delhi: Moving to put in place a bankruptcy framework in India, the government on Thursday appointed M.S. Sahoo as the chairperson of the Insolvency and Bankruptcy Board of India.
Sahoo is currently a member at anti-trust regulator Competition Commission of India and was earlier a member at capital markets regulator Securities and Exchange Board of India (Sebi).
“The Appointments Committee of the Cabinet (ACC) has approved the appointment of Shri Madhusudan Sahoo, Member, Competition Commission of India as Chairperson of the Insolvency and Bankruptcy Board of India (IBBI) for a period of 5 years or until further orders, whichever is the earliest,” said the order uploaded on the website of the department of personnel and training.
The Insolvency and Bankruptcy Code, 2016 was enacted earlier this year, paving the way for India to have a new bankruptcy law that will ensure time-bound settlement of insolvency, enable faster turnaround of businesses and create a database of serial defaulters.
The new code replaced existing bankruptcy laws and covers individuals, companies, limited liability partnerships and partnership firms. It will amend laws including the Companies Act to become the overarching legislation to deal with corporate insolvency. It will also help creditors recover loans faster.
The appointment of a chairman for the Insolvency Board will pave the way for setting up of a complementary eco-system for successful implementation of the bankruptcy code. The board will regulate insolvency professionals and information utilities and handhold the first few insolvency cases.
Insolvency professionals will be a new class of professionals that will specialize in helping sick companies, while information utilities will collate all information about debtors to prevent serial defaulters from misusing the system.