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Insolvency and Bankruptcy Code May Soon Take Precedence Over Other Laws

Steel News - Published on Mon, 02 Dec 2019

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Mint reported that a set of amendments to the Insolvency and Bankruptcy Code that India’s ministry of corporate affairs will move in the on going winter session of Parliament will make it prevail over other laws including the Prevention of Money Laundering Act. The government intends to introduce a ‘non obstante’ clause in IBC that will be sufficient to give the Code primacy notwithstanding any conflicting provisions in other statutes as IBC is a newer law. This will give protection to new investors.

This is being done so that new investors putting up money to rescue bankrupt companies under the supervision of company law tribunals are protected from liability arising from the wrongdoings of previous managers and shareholders.

The rescue of bankrupt Bhushan Power and Steel Ltd by JSW Steel is currently stalled on account of complications arising from a probe by the Enforcement Directorate and the attachment of BSPL’s assets.

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Posted By : Rabi Wangkhem on Mon, 02 Dec 2019
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