Govt, IBBI eye checks on shady pre-bankruptcy business deals

The Union government is looking to tighten the noose around shady transactions at companies undergoing bankruptcy proceedings committed by previous managements, two people aware of the plans said.

- Gireesh Chandra Prasad

The government is working with the Insolvency and Bankruptcy Board of India (IBBI) to find ways to identify and examine such transactions more thoroughly, in an effort to reverse them and recover the money.

The idea is to have a more robust assessment of questionable transactions which fall in the classes of'preferential,' 'undervalued,' "fraudulent' and 'extortionate,' so that it forms a strong basis for the government to take action, and for tribunals to reverse them, enabling clawback of assets.