I was pleased to read that others are picking up on the excellent work undertaken by Indian Prime Minister Narendra Modi and his government.
Among the legal reforms alluded to in Russell Stamets’ recent post for the FCPA Blog about Mr. Modi’s new Bankruptcy Code.is the country’s
The Code’s predecessor was a multi-layered muddle of statutory rules and a Bleak House-like judicial system which did little to instil confidence in foreign businesses looking to invest in India.
As fraud and asset recovery lawyers, we are eminently aware of the dangers that poorly-written legislation or a slow judicial process can bring to bear, when the unscrupulous seek to use the law’s inherent weaknesses to their own ends.
Mr. Modi and his government have clearly recognized that the old bankruptcy laws were not fit for purpose. Not only did they drag out and perpetuate the insolvency process, they also opened a door to corruption and acted as a green light for the deceitful to use "tactical" bankruptcy as a means to commit fraud. It is imperative that countries have robust bankruptcy systems, as this instills confidence in foreign investors who otherwise may shy away from capitalizing in that jurisdiction.
When mycolleagues and I were alerted to the impending Indian Bankruptcy Code by our New Delhi representative, Shreyas Jayasimha, we approached the Indian government and offered our help on a pro-bono basis, to see if we could offer any insight that would improve the effectiveness of the legislation. We were delighted when the senior officials in charge of drafting the legislation invited us to meet with them so they could consider some of our suggestions.
To this end I and others travelled to India and were deeply impressed by the friendliness and kindness shown to us by the local people.
We held several meetings with the senior officials concerned. They were very responsive to our suggestions. Indeed, we had drafted a ‘White Paper’ ahead of our visit that encapsulated recommendations. Those we met were extremely knowledgeable on the subject but open-minded to our observations. We are sending a second delegation to India in the near future, armed with information that will hopefully assist Indian legislators in formulating a future new law on cross-border insolvency cooperation.
It is this attention to detail and determination to draft the Bankruptcy Code that underpins Mr. Modi’s determination to free India from the manacles of corruption, at a time when the country is rapidly developing into a player on the world economic stage. This process of being seen to discard the old ways appears to be gathering momentum and in my view will generate further confidence and enthusiasm among the international community.
As outlined by Russell Stamets, there is plenty of room for improvement in India’s bureaucracy. But in Mr. Modi India has a leader prepared to work to change the systems that should have been ruled defunct many years ago. It is this willingness to implement change that shines through when you visit the country.
Although the regime may not take to criticism too kindly, in fairness he and his officials are facing an uphill battle to right the wrongs of many generations. It is obvious to all that there remains a compliance risk for companies conducting business with India. But we need to encourage Mr. Modi and his government to keep forging ahead with their reforms in order to maintain momentum.
What we shouldn’t do is decry their efforts simply because there are historical hurdles to overcome. They know and understand this, so to this end anything ICC FraudNet can do to assist them in their endeavours will hopefully be accepted in the spirit that it is being offered.