Union Minister for Corporate Affairs Shri Murli Deora has desired that concerted action to be taken to expedite the process of liquidation of companies which is currently taking inordinately long. In the conference of Official Liquidators organised by the Ministry recently to discuss ways for expediting liquidation process the it was opined that one of the major factors responsible for India™s low rank in the global doing business survey conducted by the World Bank is the time taken for liquidation of companies. The Secretary, Ministry of Corporate Affairs Shri D.K.Mittal also reviewed the performance in this area with all the Official Liquidators in the country. A series of measures were also identified for expediting liquidation during the one day conference. The meeting also considered various new guidelines drafted by the Ministry which will expedite the process of liquidation. These guidelines will also help in better preservation of assets of companies under liquidation ensuring that the creditors and shareholders get what is due to them.
The shortage of manpower being a biggest constraint facing the OLs it was decided to augment the manpower available with the liquidators. One of the problems faced by OLs is the difficulty in identifying the assets of companies since the location and nature of assets is not disclosed in the balance sheets. It was decided that companies likely to go into liquidation would be identified through specific trigger points. Those companies which fall under this category would be required to give additional disclosures which would enable liquidators to quickly take possession of the assets. It was informed that changes in the rules regarding liquidation are also being considered by the ministry.
Specific time-bound targets were set for the liquidators and it was decided to review the progress on a monthly basis during the one day meeting.