India bars defaulting firm owners from bidding to buy back assets

MUMBAI: India tightened its fledgling bankruptcy and insolvency rules on Thursday, potentially barring owners of 12 of the country’s biggest loan defaulters from bidding to buy back their assets when they are auctioned as part of bankruptcy proceedings.
The government passed an executive order that aims to “keep-out such persons who have wilfully defaulted, are associated with non-performing assets, or are habitually non-compliant and, therefore, are likely to be a risk to successful resolution of insolvency of a company,” the corporate affairs ministry said in a statement. Under the revised rules, borrowers whose loan accounts are classed as non-performing for a year or more will not be eligible to bid for the assets in bankruptcy proceedings, the ministry said. The revised rules also bar “willful” defaulters and associates of the defaulting borrowers from bidding for the assets, according to the statement.