Debt resolution plan: Exchanges give firms 30 minutes to inform them of NCLT order - MMJC

In a bid to curb speculative trading, stock exchanges have mandated listed companies undergoing insolvency processes to inform them within 30 minutes of an NCLT approving their debt resolution plan.

Makarand Joshi, Partner, MMJC, said market speculation begins immediately after the IBC bidding process starts and continues till the resolution plan is approved. Tight secrecy needs to be maintained in the whole process with timely disclosures. The regulator must track the trades of Resolution Professionals, Committee of Creditors members, persons aware of sensitive information, their immediate relatives, and connected entities, he added. In the past, there have been instances of a company undergoing the IBC process seeing a sudden increase in its share price. For instance, Ruchi Soya was listed at ₹17 on January 27, 2020. On June 10, the share at ₹839 — a staggering 4,835 percent rise after the Patanjali group acquired the company through the insolvency process.

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