Redefining ‘Connected Parties’ in Insolvency Code May be Needed: Arun Jaitley

New Delhi: Finance Minister Arun Jaitley on Tuesday said changes in Section 29A of the Insolvency and Bankruptcy Code (IBC) may be required as the earlier amendment may have been “too wide” in relation to the definition of related parties. “Some people have represented to me that in the amended 29A, the reading may be too wide particularly in relation to the definition of related parties?” he said at a conference on IBC co-hosted by Insolvency and Bankruptcy Board of India (IBBI).

Section 29A, which was introduced via an ordinance in November 2017, bars wilful corporate defaulters and “connected person” from bidding for stressed assets (including own), which is under the Corporate Insolvency Resolution Process (CIRP). The ineligibility criteria not only ruled out Ruias, Singhals and Manoj Gaur from submitting resolution plans for their insolvent assets Essar Steel Ltd, Bhushan Power and Steel Ltd and Jaypee Infratech, respectively, but could also prevent ArcelorMittal Chairman L.N. Mittal, a bidder for Essar Steel, as his younger brother Pramod Mittal’s company is a defaulter.

Another issue that the Minister wanted to be considered is the role of small and operational creditors in the whole insolvency resolution process. (IANS)

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