InvestorQ : What is your view on allowing defaulting promoters to bid for their own companies in the NCLT?
Dawn Cherian made post

What is your view on allowing defaulting promoters to bid for their own companies in the NCLT?

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Mitali Bhutta answered.
3 weeks ago
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First and foremost, there is a need to respect the NCLT process and ensure that the decision by the COC and RBI is final in such cases. Wadhawan bid looks like an attempt to delay the resolution process till PEL loses interest in DHFL altogether. DHFL was not about business cycles and industry risk. It was about money laundering by the promoters and could have been best avoided. The million dollar question is whether there is really a better way for it?

Former promoters should be allowed to buy back the company only under very special circumstances. Firstly, promoters can be given a chance where the bankruptcy was purely due to business factors like demand and supply cycles. It is OK to bring back promoters, if and only if, these promoter brings specific and unique skills.

However, one rule should clearly be that wilful defaulters and promoters guilty of money laundering be surely barred from NCLT bidding process. If these cases get too delayed, bidders will just lose interest.

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