Section 29A of the Insolvency and Bankruptcy Code bars ousted promoters of an insolvent company from regaining control. It has not specifically disarmed any class of participants, but disallowing wilful defaulters from participating in asset-bids would mostly hurt promoters of debt-ridden companies, experts opine.
ET spoke to industry watchers to gauge their views. Leave aside some large loopholes, consensus seems that the Ordinance will stop dishonest promoters. Anil Bhattar, COO of Radisson Consulting, a firm specialising in bankruptcy cases, says, Dishonest promoters, viewed the Code as a means to settle debt cheaply and regain control of business. Section 29A may help to prevent such practices.
That said, a section of respondents…
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