E-auction of sick business assets on dedicated platform may become compulsory

New Delhi: Auction of assets like land, buildings, plant and machinery belonging to businesses getting liquidated is likely to see a wider public participation, with the Insolvency and Bankruptcy Board of India planning to make these transactions more mainstream. After asking liquidators on 29 October to list all such assets of companies facing liquidation on the eBkray platform set up by an alliance of state-run banks, IBBI is now considering making it compulsory to conduct auctions through this portal, two persons informed about the development said. When IBBI, a regulator that supervises corporate insolvency proceedings, introduced compulsory listing of liquidation assets under the IBC on the portal from 1 November, it said liquidation professionals ‘may’ use it for the sale of assets in all ongoing cases, indicating its preference for auctions on this platform. Prior to IBBI’s 29 October circular, the assets were being auctioned on different platforms with the information being available only at the time of publishing of auction notice, leading to information asymmetry among potential bidders who were unable to track such auction notices, explained Siddharth Srivastava, partner at law firm Khaitan & Co. Anjali Jain, partner at law firm Areness Law, said the eBkray platform has gained momentum recently in creating greater visibility, and thereby, a bigger market and a larger pool of potential bidders for distressed assets.