The Associated Chamber of Commerce and Industry (ASSOCHAM) today successfully organised its 6th National Summit on Insolvency & Bankruptcy Code and Valuation in Mumbai. The Summit witnessed participation from highly credible speakers and 200+ participants, representing the resolution ecosystem, and promoted an engaging exchange of ideas around Promoting Investment in Stressed Assets Under the IBC.
The event was inaugurated by Mr. Ravi Mittal, Chairman, IBBI (Virtually), Ashwini Kumar Tewari, MD of State Bank of India, Rajesh Sharma, Former Member, NCLT, Santosh Shukla, ED, IBBI, Bahram N. Vakil from AZB & Partners, Sumit Kanna from Deloitte, Shailendra Ajmera from EY.
At the opening remarks and welcome address, Shri Anil Goel, Chairman, ASSOCHAM National Council for IBC & Valuation and Founder & Chairman, AAA Insolvency Professional LLP, equated the multiple and frequent challenges faced during the resolution process with 'Hydra heads'. "These Hydra-heads need to be addressed by the stakeholders collectively to make the resolution process efficient and impactful", said Shri Goel. "For doing so, there needs to be close coordination among all parties", he further added.
Joining over the web, Hon'ble Chief Guest and Chairperson, Insolvency and Bankruptcy Board of India (IBBI), Shri Ravi Mital, said, "There are three key challenging areas that emerge from our conversations with the resolution applicants. First is transparency and efficiency in bidding, which demands timely access to quality information. This also means that the basis of valuation needs to be put up in the public domain and discussed in CoC". He further added, "Reducing process delays is the second area and third being sustained torment in terms of old obligations and litigations one has to go through even after taking the possession".
Mr Mital batted for a clean slate in terms of possession of assets to ensure the credibility of the process. The event also witnessed a special address from Shri Santosh Shukla, ED, Insolvency and Bankruptcy Board of India, as a part of the inaugural panel. Shri Shukla said, "It's all about managing the unknown unknown and the known unknown. India already had a deep market for stressed assets. Efforts are needed towards making the right ambience for the market players. It's all about managing the known-unknown factors, such as reducing the time for resolutions, infusing transparency, and channelling the collective efforts towards the imposition of dynamic law. The market has great potential not only in terms of resolution but in creating jobs and new avenues across sectors like manufacturing, metals, gems, steels, etc.".
Pointing to the unknown-unknown, Shri Shukla said, "valuation is one such area that needs to be defined and decluttered. We need to find better solutions in this area". He further batted for industry participants not to work in silos and find faults - but make collective efforts.
Shri Ashwini Kumar Tewari, MD, State Bank of India, presenting the lender's perspective, said, "The IBC process has been structured uniquely. It's a living act where changes happen frequently. Therefore, it's responsive to the changes around us. The delays are too challenging and continue to be the bane".
Shri Tiwari further highlighted the need to eliminate the stigma associated with NPAs and added, "In India there is still a lot of stigma over Insolvency or Bankruptcy, which is not the case in the west." He further highlighted the need to have a greater degree of empathy and course correction in the process.
While dwelling upon his experience and presenting the NCLT perspective, Shri Rajesh Sharma, Former Member - Technical, National Company Law Tribunal (NCLT) suggested that as far as possible, the Banks and Financial Institutions may depute the same officer into COC who remained associated with the project at the appraisal, sanction, disbursement, monitoring and recovery stage of the project and Corporate Debtor since he is certainly having better insight about the project. In majority of the cases members deputed by the financial institutions to the COC lack a thorough understanding of the case or industry. This knowledge gap needs to be improved as knowing the history and facts of the case not only expedites resolution but also ensures a rewarding outcome for the economy".
Shri Sharma also batted for lowering expectations from Resolution Professionals and induction of Administration , on the lines of Arbitrator to oversee the conduct of the COC and also to mediate and conciliate the divergent views adopted by stakeholders, to start with larger projects of 500 crore and above and thereafter percolate the same for lower value projects.
Putting across the legal view, Shri Bahram N. Vakil, Founder & Senior Partner, AZB & Partners, said, "IBC just did an incredible job, especially pre-covid - when the time to resolve halved and the recovery doubled. This was made possible through a dynamic law that corrected and updated itself in sync with the developments. MSMEs, too got an opportunity to gain leverage and resolutions happened like never before. However, post covid, the trend reversed; therefore, it is now time to have an IBBI 2.0". Shri Vakil also requested the legal community to be 'politely impatient' and not 'reinvent the wheel' to re-open already settled by the Courts.
During his theme address, Shri Sumit Khanna, Subject Matter Expert, Deloitte, said, "Businesses have been turned around to create value for be communities post insolvency and resolution. The successes of insolvency processes are well demonstrated. IBC had done a commendable job restarting the economic cycle when the economy was in a difficult situation. The recent regulations that allow in the absence of the plan to sell the business have also been a welcome innovative step". Shri Khanna also highlighted the need to counter judicial activism and delays as they dilute the insolvency law's power and impair investor confidence.
Representing as Knowledge Partner at the event, Shri Shailendra Ajmera, Partner- Transaction Advisory Services, EY, said, "Initial teething problems are largely behind us. IBC has emerged as a critical pillar in the Indian economic story. A testament to pathbreaking reform that infused transparency and developed a stressed asset market in the country is witnessing a plateaued confidence than initially posed by creditors. Delays have started to mar the process. The time has come to put the process and the confidence back on track". Shri Ajmera also unveiled the ASSOCHAM-EY Knowledge Report on the occasion.
Ms. Pooja Mahajan, Co-Chairperson, ASSOCHAM National Council for IBC & Valuation and Managing Partner, Chandhiok & Mahajan, Advocates and Solicitors during her Vote of Thanks address summarised the challenges highlighted, and ideas discussed by each panellist and concluded the inaugural session.