After appointing M.S. Sahoo as chairperson of the Insolvency and Bankruptcy Board of India, the government has finalized the names of four members to the board in order to make it functional.
They are: Ajay Tyagi, additional secretary, department of economic affairs; Amardeep Singh Bhatia, joint secretary, ministry of corporate affairs; G.S. Yadav, joint secretary, department of legal affairs, and Unnikrishnan, legal adviser, Reserve Bank of India (RBI).
Sahoo took oath of office as chairperson of the board from finance minister Arun Jaitley on Saturday.
Sahoo last served as a member at anti-trust regulator Competition Commission of India and was earlier a member at capital markets regulator Securities and Exchange Board of India (Sebi).
According to the Bankruptcy and Insolvency Code passed by the Parliament, apart from a chairperson, the board will have three members from among the officers of the central government not below the rank of joint secretary or equivalent, representing the ministries of finance, corporate affairs and law.
Another member will be nominated by RBI while five other members will be nominated by the central government, including three whole-time members.
All questions which come up before any meeting of the board shall be decided by a majority vote of the members present and voting. In the event of a split, the chairperson shall have a second or casting vote.
A government official aware of the development said the government has invited applications for appointing three whole-time and two part-time members and will make the final appointments soon.
The priority for the government is to finalize the rules while the board has to finalize the regulations that will provide the operational details for the insolvency professionals, the government official said, requesting anonymity. The Insolvency and Bankruptcy Code, 2016, was enacted in May, paving the way for India to have a new bankruptcy law that will ensure a time-bound settlement of insolvency, enable faster turnaround of businesses and create a database of serial defaulters.
The new code replaced existing bankruptcy laws and covers individuals, companies, limited liability partnerships and partnership firms. It will amend laws including the Companies Act to become the overarching legislation to deal with corporate insolvency. It will also help creditors recover loans faster.
Insolvency professionals will be a new class of professionals that will specialize in helping sick companies, while information utilities will collate all information about debtors to prevent serial defaulters from misusing the system.