The number of companies that have been referred to the National Company Law Tribunal for resolution under the Insolvency and Bankruptcy Code (IBC) has crossed 400. A great many of these are small and medium companies that are most likely to go into liquidation. However, all the attention is on the big 12 companies that have been taken to the Tribunal by the banks after being nudged by the Reserve Bank of India. (See The Dangerous Dozen, BT, August 13, 2017).
These 12 companies accounted for an estimated 25 per cent of the total non-performing assets (NPAs) of roughly ₹8 lakh crore in the banking system. Though they defaulted on their loans, the market consensus is that most of them have good assets and the businesses ran into trouble because…