Indian entrepreneurs certainly need protection in some way when they are involved in the Insolvency and Bankruptcy Code (IBC) process as it is heavily in favour of financial investors, said Mr. Badrinath Durvasula, Sr. Vice President and Head Legal- Services at Essar Capital Ltd at a virtual conference.
“When you tackle the IBC from corporate debtor’s side, it has been completely lopsided in favour of the financial investors because it is serving the good of the financial mechanism rather than looking at the kind of ethos with which Indian industry and capitalism has been brought up in the system. The Indian entrepreneurs certainly need protection in some way,” Mr. Badrinath said in his address during The Economic Times Legal World IBC Virtual Conference held recently.
Mr. Badrinath said that most of the corporate debtors were feeling a pinch and observed that companies were walking into a legislation without adequate protection for themselves to arrive at a settlement.
“We need to differentiate between a financially distressed asset and an economically distressed asset” He said adding that a financially distressed asset should be handled carefully compared to the economically distressed.
During his address, Mr. Badrinath also sought introduction of an enabling provision to avoid monopoly of a situation by competition by design or proxy as when a corporate issues an information memorandum, most of the times, he said, the corporate debtor was “walking” into the hands of its own competitor.
“I would vouch that there is a lot of positivity happening on the conduct of corporate debtors in arriving at settlements to thwart IBC mechanism, because of the suspension of the proviso in this pandemic and Corporate Debtors need a little more time to really bring all unresolved issues to a conclusive and a displayable scenario,” he said.
Separately, during his speech, Mr. Badrinath also called for integration of the Indian IBC process with those prevalent internationally in order to be able to compete in real terms globally.
He also sought improvement or appropriate facilitation of the corporate debtor’s representation during the IBC proceedings.
“The whole resolution process must bring in money quickly to ensure that the Corporate Debtor institution is back on its tracks and is able to deliver the value for money,” he said.
Mr. Badrinath Durvasula has recently joined Essar Capital and has nearly 30 years of experience in implementing legal policies for large corporates in manufacturing, oil and gas and service sectors and has held several leadership positions at HCC Ltd., Adani Group , Larson & Toubro Ltd., Reliance Industries amongst others.
Essar Capital Limited is the investment manager of Essar Global Fund Limited and it monitors and manages the entire portfolio of investments owned by EGFL in Energy, Infrastructure, metals and mining and services and technology businesses.
