Free Press Journal

Building market institutions can help M&A move faster: IBBI chief


New Delhi : Building the institutions of market can help the mergers and acquisitions (M&As) process to move faster, chairperson of the Insolvency and Bankruptcy Board of India (IBBI), M S Sahoo said at an ASSOCHAM event held in New Delhi.

“We have not completely moved to market model as of now but IPO is a complete model hub market, takeover almost, I think if we can build institutions of market probably that will all help the M&As to move faster,” said Sahoo while addressing an ASSOCHAM conference on M&As.

Highlighting how the M&A resolution process should be in hands of market participants, he said that the Insolvency and Bankruptcy Code (IBC) has segregated the commercial aspects of insolvency from judicial aspects.

“The IBC has put the commercial aspects in hands of stakeholders and judicial aspects with tribunal and with all that it has put a timeline with firm consequences,” said Sahoo.

“It says that if you do not do that in 180 days’ time, the company will compulsorily go into liquidation,” he added. The IBBI chief further said that M&As are very important activities for economies of scale, economies of scope, from micro and macro point of views and it affects the rights and interests of two sets of people.

“It does readjustments of rights of financials of an enterprise, equity holders or debt holders and it also affects the rights of the consumers of the products produced by an enterprise,” he said.

Talking about three very high level principles in M&A sector, Sahoo said, “It should gel well with current reforms of last three years in Indian economy whereby we have almost moved on many matters so that decisions are taken by the parties themselves not by any third person, government or court.”