The move is aimed at blocking backdoor entry of promoters who run the enterprise aground.
In order to prevent any frivolous bids, the Insolvency and Bankruptcy Board (IBBI) has tightened the disclosure norms for insolvency professionals.
The move is also aimed at blocking backdoor entry of promoters who run the enterprise aground.
The committee of creditors has been empowered to inquire into the bidders' background thoroughly and also viability of resolution plans.
"A key objective of the Insolvency and Bankruptcy Code (IBC) is insolvency resolution of corporate persons in a time bound manner for maximisation of value of their assets," IBBI was quoted as saying.
"This objective would be achieved only if a resolution process ends up with a credible resolution plan that maximises the value of assets of the corporate debtor, that is, the plan has been drawn up realistically and would be implemented successfully."
As per IBBI, a large number of potential bidders have been expressing interest just to get data, and promoters using benami companies to bid for the same assets on which they defaulted.