MUMBAI: For Indias overwhelmingly complex legal system, the Insolvency and Bankruptcy Code (IBC) is billed as the silver bullet that would help lenders recover about Rs 9 lakh crore of sticky loans. But the law has an unwanted side effect loss of jobs.
Since IBC was used by lenders to slice through the thicket of procedures and bureaucracy, about a dozen companies have gone into liquidation, with no viable resolution plan in sight. This may have led to at least 2,400 permanent employees losing their jobs, according to an estimate provided by Insolvency Professionals, a Delhi-based firm.
The Code has enough incentives to motivate the committee of creditors to invariably opt for a resolution if enterprises value exceeds liquidation va…
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