Norms for liquidation of firms on the anvil

The government is keen to quicken the process of liquidating company assets in order to protect the interests of stakeholders and avoid exce...

The government is keen to quicken the process of liquidating company assets in order to protect the interests of stakeholders and avoid excessive delay.

Minister of Company Affairs Prem Chand Gupta has advised Company Affairs secretary Komal Anand and other senior officials to frame a set of norms that will make insolvency proceedings clear and take a uniform approach.

Gupta has asked senior MCA officials to monitor liquidation proceedings more closely. ‘‘The track record of liquidation proceedings in India is shameful, it has to improve,’’ he said.

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On Tuesday evening, the minister delivered a reprimand to official liquidators, noted insolvency experts and regional directors.

He said there were more than 5,700 firms under liquidation, and the average time taken to complete proceedings against them is 15 to 20 years. Despite the decades spent, the recovery rate was at 12.5 per cent in India, as against 92 per cent in Japan, Gupta said. ‘‘We cannot blame the courts. The regional directors have to see that things move faster,’’ he said. Gupta has asked for the next meeting of regional directors and insolvency experts in three months.

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