Rs 100-cr plan to speed up sick cos' liquidation
Govt has drawn up an ambitious plan costing Rs 100 crore to modernise the legal and administrative machinery responsible for liquidating sick companies.
By Souvik Sanyal, ET Bureau |
NEW DELHI: The government has drawn up an ambitious plan costing Rs 100 crore to modernise the legal and administrative machinery responsible for liquidating sick companies.
Thousands of sick enterprises waiting for decades to see their assets sold-off and liabilities being settled, can expect a speedy liquidation process now. Winding up companies is very essential in a developing economy to re-deploy capital in more useful ventures.
The proposal, which promises to relieve around 10,000 sick companies of a prolonged procedural time-lapse, is at an advanced level of consideration with the Planning Commission studying the project���s feasibility cost.
Officials in the ministry of corporate affairs say that the proposed project is aimed at bringing in extensive information technology (IT) upgradation and infrastructure development in the offices of the 14 official liquidators spread across the country. The high court appointed liquidators act as the authority which oversees auctions of distressed company assets and pay of its debts.
With the country yet to have the proposed National Company Law Tribunal and the new sophisticated insolvency code still in the pipeline, corporates go through an exhaustive legal process of liquidation. The reasons for delay include archaic norms and shortage of designated officers, with the existing framework being time-consuming as well as inefficient.
Although the present set of proposal is independent of the ministry���s bigger on-going computerisation scheme MCA-21, officials say that the project will eventually be made to provide an e-governance solution. While the current proposal calls for computerising the offices of the liquidators and set up a dedicated website that provide online details about the assets put on block, eventually, official liquidators may be able to invite online bids for auction of distressed assets.
The project is likely to provide an IT infrastructure to over 2,000 staff and is slated to have a time-span of 3-4 years. It is understood that a bidding process is underway to select an IT consultant to prepare a comprehensive project blue print.
Bids have been received from prominent technology solution groups. The ministry���s on-going project MCA-21, that facilitates e-filing of documents by companies, is now managed by Tata Consultancy Services (TCS). The MCA-21 is one of the government���s��� mission-mode projects that aims to computerise the way corporate compliances are meted out.
Thousands of sick enterprises waiting for decades to see their assets sold-off and liabilities being settled, can expect a speedy liquidation process now. Winding up companies is very essential in a developing economy to re-deploy capital in more useful ventures.
The proposal, which promises to relieve around 10,000 sick companies of a prolonged procedural time-lapse, is at an advanced level of consideration with the Planning Commission studying the project���s feasibility cost.
Officials in the ministry of corporate affairs say that the proposed project is aimed at bringing in extensive information technology (IT) upgradation and infrastructure development in the offices of the 14 official liquidators spread across the country. The high court appointed liquidators act as the authority which oversees auctions of distressed company assets and pay of its debts.
With the country yet to have the proposed National Company Law Tribunal and the new sophisticated insolvency code still in the pipeline, corporates go through an exhaustive legal process of liquidation. The reasons for delay include archaic norms and shortage of designated officers, with the existing framework being time-consuming as well as inefficient.
Although the present set of proposal is independent of the ministry���s bigger on-going computerisation scheme MCA-21, officials say that the project will eventually be made to provide an e-governance solution. While the current proposal calls for computerising the offices of the liquidators and set up a dedicated website that provide online details about the assets put on block, eventually, official liquidators may be able to invite online bids for auction of distressed assets.
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The project is likely to provide an IT infrastructure to over 2,000 staff and is slated to have a time-span of 3-4 years. It is understood that a bidding process is underway to select an IT consultant to prepare a comprehensive project blue print.
Bids have been received from prominent technology solution groups. The ministry���s on-going project MCA-21, that facilitates e-filing of documents by companies, is now managed by Tata Consultancy Services (TCS). The MCA-21 is one of the government���s��� mission-mode projects that aims to computerise the way corporate compliances are meted out.
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