Inside the CIRP: 180 Days of Helplessness
THE IBC FILES: AN ENTREPRENEUR’S PERSPECTIVE
Article 4 of 8 | The Story of How a Process Meant to Save My Company Became the Machine That Destroyed It
In the previous articles, I told you how Su-Kam — a company I built from selling pens on a bicycle to a ₹600 crore empire present in 70+ countries — was taken to the NCLT by SBI for just one month of default. I told you how Section 29A barred me, the builder, from even bidding for my own company.
But I haven’t yet told you what happened inside those 180 days of the CIRP — the Corporate Insolvency Resolution Process.
What I witnessed inside is far worse than what the law says on paper. I wrote to the Prime Minister about it in 2020, while my company was still bleeding. Today, I share that story with the country.
The IBC was made with the right intention for the revival of stressed companies. But the ground realities are totally contrary to the intention of the law. It’s not the law but the impersonal and ruthless approach that damaged the company I built — and the banks lost the very value they thought they would recover.When I Asked My Bank for Time, They Gave Me NCLT
Before I take you inside the CIRP, let me tell you how Su-Kam ended up there.
In India, showing losses to your bank is practically treated as a crime. The moment a company’s balance sheet dips, the bank wants its money back. No patience. No understanding that businesses go through cycles. No recognition that we are a developing economy where companies face extraordinary headwinds.
This creates a perverse reality. Companies across India fudge their balance sheets to keep bankers satisfied. Every entrepreneur knows this. Every banker knows this. Nobody talks about it.
In 2017, Su-Kam was going through losses due to my personal issues — I was going through a divorce. We approached our bankers for restructuring of the loans. Not a single rupee of haircut. We just asked for time. Our lead banker IDBI sat on the proposal for 8 months. Eight months of meetings, mails, and silence. Then SBI — for just one month of default — filed at NCLT against the wishes of the other consortium bankers. A running company generating ₹600 crore was pushed into insolvency because one banker was impatient and another was indifferent.
Till the day Su-Kam was admitted into NCLT, all salaries were paid. All taxes were paid. All factories were running. All authorities were satisfied. The brand had a strong market pull. We weren’t a sick company — we were a stressed company that needed breathing room.
The Indian banking system needs to understand something fundamental: in a developing economy, companies will face stress. The question is — do you help them recover, or push them off a cliff?
Day Zero: When Strangers Took Over My Life’s Work
The moment NCLT admitted Su-Kam, the Board of Directors ceased to exist. The reins went to a “Resolution Professional” — the RP. I, the person who built the company over 25 years, was told I have no role to play.
There was no handover process. None. No joint meetings. No transition plan. No protocol to ensure the running company continued functioning normally.
FROM MY LETTER TO THE PRIME MINISTER (2020)
“The RP with his team takes control over the various departments of the company without any handover process defined in the NCLT. The RP does not have any process for joint meetings before handing over the company. Rather it’s completely opposite — the RP comes and his first task is to inform the promoter that he has come and the promoter has no role to play now onwards. So from here the mismanagement and the destruction of the company start happening.”
Then came the emails. Communication was sent to every stakeholder — employees, vendors, suppliers, distributors — announcing that Su-Kam was under insolvency. That the RP was now in charge. That I was no longer the contact person for the company I had created.
Think about what this does to a running company. I was running Su-Kam with tight controls and the best team I had built over decades. The moment the RP made that announcement, my employees got insecure. Confused. They had no relationship with this stranger and his team. When leadership becomes most critical to save a stressed company — that’s exactly when the leader is removed and replaced by an RP who is simultaneously handling two or three other companies.
I never allowed my own son to inherit a Director position because I knew his inexperience could ruin the company. But this law allows people with no experience of running businesses to occupy top positions and make critical decisions. The person who created the company is kept out. An outsider who knows nothing of the business is thought of being capable of running it.
There is no SOP — no Standard Operating Procedure — for how this transition should happen. No protocol to prevent panic. The announcement itself becomes a death sentence.
I Watched My Best People Walk Out the Door, One by One
What the RP did next made things worse. Instead of working with my existing team to boost morale, his team started looking for faults and gaps. The organisation split into two camps: outsiders (RP’s people) and insiders (my employees). They did not share the common goal of saving the company.
Insecurity crept in. People started looking for jobs. Everyone began safeguarding themselves rather than working for revival. And no one — not the RP, not the COC, not the court — thought to form an HR committee to retain the talent that was walking out.
The RP was busy ticking his checklist rather than taking control of the company. Good people left one by one. With them went the institutional knowledge that took decades to build. The domain expertise. The customer relationships. The supplier trust. Everything that made Su-Kam run — it all walked out the door while the RP was doing his paperwork.
When a company is under stress, retaining key people is the single most important thing. But there is no provision for it. No HR committee. No empowerment to make retention decisions. No one cares that you’re losing the very people who could save the company.
The Newspaper Ad That Killed My Brand
As part of NCLT guidelines, a newspaper advertisement of liquidation is published. The moment that ad appeared for Su-Kam, the company’s value nosedived instantly.
FROM MY LETTER TO THE PRIME MINISTER (2020)
“If any running company gives an advertisement of liquidation in the press, the value nosedives instantly. Banks lose the value of the asset on the same day. Competitors take full advantage and circulate the message far and wide — amongst customers, employees, distributors. No one would buy the product of a company under liquidation. The brand value starts to diminish from that day. The NCLT notice is displayed on the website too, scaring off customers. Here my point is — with all this happening, it is impossible to prevent the value from diving extremely low, quite opposite from the sentiment of the law.”
Su-Kam was a brand known across 70 countries. We had kept Chinese inverters out of India, Africa, and the Middle East for two decades. Our competitors had been trying for years to crack our market share. The NCLT ad did for them in one day what they couldn’t do in twenty years.
Two valuation reports are created during CIRP: the Liquidation Value (scrap price) and the Fair Value (going concern). According to IBBI data, the haircut relative to admitted claims is 67-68%. Banks recover barely a third. But most of this value erosion happens during the CIRP itself — because of the process, not despite it.
The law was made to keep the value of the company intact. But the process is so mechanical that rather than preserving value, it erodes it. And Section 29A makes it worse — by barring me, the one person who could convince buyers to pay a real price, the company was left to outsiders who only wanted a scrap sale.
The Committee That Had No Time for My Company
The Committee of Creditors — the COC — holds the real power in the CIRP. They direct the RP. They approve decisions. They decide the company’s fate.
I attended many of those meetings. What I saw there broke me.
FROM MY LETTER TO THE PRIME MINISTER (2020)
“Throughout these meetings I felt extremely dejected. There was hardly any time or thought given to run the company effectively. All discussions were centered around fault findings and procedural jargon. They have a checklist to follow and participate as a court-driven process rather than thinking about company revival. The COC doesn’t want to invest any money to keep the business running — their only interest is to skip any blame that might fall on them. The meetings are most of the time attended by junior officers who don’t understand the seriousness and cannot take major decisions. The company has nobody to look after.“
In one of those meetings, I was pressurised to accept discontinuation of my salary. I had already been humiliated multiple times. Even when you fire an employee, you give them a farewell and three months’ notice. But I — the person who built this company for 25 years — was thrown out and made to feel like a complete outsider. All while the COC meetings, RP expenses, and legal fees were being paid from the money of the company I created.
The COC has extraordinary power and zero accountability. They can sell the company for any price. They can destroy its value. They cannot be held liable. Meanwhile, I am liable for every decision I made while running Su-Kam. IBBI has been changing laws for 8 years — every change protects financial creditors. Not one protects the company or the entrepreneur.
The Patient Is in ICU — And They’re Interrogating Him
The intent of the Code was revival. In a stressed company, the first job should be: how do we save this company? Not: what did the promoter do wrong?
It’s like the patient is in ICU and instead of treatment, he’s being asked what wrongs he committed to land in the hospital. The patient cannot answer questions until he receives basic care. Time is everything — if lost, the patient dies.
That’s exactly what happened at Su-Kam. The RP and his team spent their energy on fault-finding. They put different agencies on forensic audits and transaction audits rather than focusing on running day-to-day operations. They lost the time to revive the company. Good employees left. Stakeholders got scared. Slowly, slowly — a running company came to a closure.
8,715 CIRPs Admitted | 1,322 Companies Saved (15.6%) | 2,950+ Liquidated
713 Avg Days (Limit: 330) | 68% Avg Haircut to Banks
No Money Coming In, Everyone Taking Money Out
The CIRP costs are staggering. The RP’s fees. His team’s salaries. Legal counsel. Forensic auditors. Transaction auditors. Valuers. The Big Four accounting firms and large corporate law firms extract enormous fees from the company’s dwindling cash. IBBI data shows CIRP costs in many cases exceed ₹1 crore.
Meanwhile, the banks — who now control the company through the COC — invest nothing. Zero. There is no legal obligation for them to put a single rupee into the company to keep it running.
No investment from banks + RP & legal fees draining the company + talent leaving + customers fleeing + brand value crashing = guaranteed death
This is not an equation for revival. This is an execution.
The RP himself has too many companies under his belt. He’s not bound for the company’s losses or profits. Whether Su-Kam survived or died, he got paid either way. His role is mainly legal, finance, and accounts — not running a business. No accountability means no incentive to save the company.
Here is my most important reform proposal: Whoever takes a company to the IBC should be required to invest money to keep it running. If banks and creditors know they must put their own money in, they will think ten times before filing. Many frivolous cases will drop automatically. The intention of the Act was to keep companies running — this one change would make that a reality.
My 70-Country Brand Was Treated Like a Roadside Shop
The IBC treats all companies the same. A manufacturing company with 10,000 employees, 74 patents, presence in 70 countries, and a brand built over 25 years is put through the same process as a 10-person trading firm. The yardstick is identical.
Separate rules already exist for MSMEs, builders, and homebuyers. Infrastructure is reportedly next. But there is zero segmentation for the companies that need it most:
Manufacturing vs. Trading — Su-Kam’s factories employed thousands. The ecosystem it created — suppliers, distributors, service centres — supported tens of thousands more. A trading desk supports a handful of people. Same treatment under NCLT.
Brands vs. No Brands — Su-Kam was a brand recognised across Africa, Middle East, and South East Asia. That brand equity alone was worth saving. Under NCLT, it was treated as scrap value.
Companies with IP — Our 74 patents in power storage, solar, and EV technology had immense national value. All gone. No one counted that loss.
Employment Scale — 2,000 Su-Kam employees lost their jobs. Their EMIs defaulted. Their children’s school fees went unpaid. Home loans collapsed. But the NCLT doesn’t differentiate between a company with 10 employees and 10,000.
The Numbers They Don’t Want You to See
IBBI publishes data on recovery rates — how much money banks got back. That’s it. That’s the only metric the system cares about.
But the data that doesn’t exist is far more damning:
Nobody tracks:
How many companies were permanently closed. How much employment was destroyed. How many manufacturing companies — with their R&D, exports, patents, trained workforce — were wiped out. How many suppliers and distributors went bankrupt in the cascading effect. How many more companies collapsed because one fell. How much of “Make in India” was unmade by the NCLT process.
The system counts money recovered. It doesn’t count companies destroyed. It doesn’t count jobs lost. It doesn’t count patents abandoned. It doesn’t count brands erased. It doesn’t count families shattered. It doesn’t count dreams killed.
FROM MY LETTER TO THE PRIME MINISTER (2020)
“In Su-Kam, directly and indirectly 2,000 people lost their jobs. Distributors, dealers, suppliers became bankrupt. Employees cannot pay EMIs for cars and scooters, school fees, home loans are getting defaulted. The catastrophic chain effect is very high and unimaginable. Customers who bought products are suffering — the company is closed, they don’t know where to look for support. At Su-Kam, my team and I created an industry that was non-existent. Filed patents. Created exports. Trained so many people. The disintegration of all this is a criminal waste for the country at large.”
In America, They Save the Entrepreneur. In India, They Bury Him.
Under America’s Chapter 11, the entrepreneur stays as “Debtor-in-Possession.” He continues to run his company. He files the reorganisation plan himself. There is DIP financing — Debtor-in-Possession lending with super-priority status — so the company gets working capital to survive. Bankruptcy is treated as a normal business event. Not a crime. Not a moral failing. Not a death sentence.
In India, everything is the opposite. The entrepreneur is removed on Day 1. No DIP financing exists. Section 29A bars him from bidding. The average case takes 713 days — more than double the 330-day limit. At the end, banks still take a 68% haircut. The company is dead. The jobs are gone. And the entrepreneur is branded a criminal.
The American system has operated for nearly five decades. It has sophisticated bankruptcy courts, experienced judges, active DIP lending markets, and a culture that understands business failure is not moral failure. India’s IBC is 8 years old, has been amended repeatedly, and every amendment protects creditors further while doing nothing for the company or the entrepreneur.
In India, channel partners, employees, and vendors are attached to the person running the company. As I wrote to the Prime Minister: people of India relate to Narendra Modi, not just the BJP or the post of Prime Minister. Similarly, the promoter is the face people relate to. By removing the leader, you shatter trust when it matters most.
That Day I Realised I Had Nothing Left
FROM MY LETTER TO THE PRIME MINISTER (2020)
“That day I realised I don’t have any other income to even run my household. I was so broken & felt like a fool to have dreams of putting India on the world map in my industry. I realised I was so busy running this company that I didn’t have any personal insurance or any investment in shares or any FDs. My fault was being totally dedicated to the company and never thinking of myself or the security of my family.”
My cars, under company registration, were recalled. My home, covered under personal guarantees, will be taken by the banks. I have been burdened with numerous cases I don’t have the financial means to contest and don’t know when they will end so I can start afresh.
I was an icon in the eyes of budding entrepreneurs. My story found its way into 3 books and many TV series, all for inspiring others. But the Code barred me from even submitting a resolution for a business I understood better than anyone else ever would.
Even when an employee is fired, he gets a farewell and three months’ notice. But I was thrown out of the company I created over 25 years of sweat and blood, and made to feel like a complete outsider — while all COC meetings, RP expenses, and legal fees were being paid from that very company’s money.
Fix the System, or Lose the Builders
The IBC has equated good and bad promoters. It needs to distinguish between those who failed and those who defrauded. Here is what must change:
REFORM: Transparency Committees
Form a committee of employees, operational creditors with substantial stake, and the RP team. Keep the RP in check. Currently, the RP overpowers the whole company.
REFORM: Financial Decisions Committee
No single person should control all finances of a company in crisis. Include the operational creditor with the highest stake.
REFORM: HR Committee for Talent Retention
When the company is under stress, retaining good people is the most important thing. It’s completely ignored today.
REFORM: Mandatory Investment by Petitioner
Whoever takes a company to IBC must invest to keep it running. This will be the biggest deterrent against frivolous filings. The intention of the Act was to keep companies running — not close them.
REFORM: RP Accountability
The RP must be bound by the company’s performance. Running companies must be treated differently from already-closed ones.
REFORM: Industry Segmentation
Different rules for different industries, sizes, and national importance. A company with 10,000 employees and 74 patents cannot be treated the same as a 10-person firm.
The Spirit of ‘Make in India’ Is at Stake
FROM MY LETTER TO THE PRIME MINISTER (2020)
“Sir, the IBC has equated good and bad promoters as same. It needs to bring in a more meaningful and structured role for the entrepreneur who built the company so that the objective of the Code is met and the interest of all stakeholders is taken care of. The entrepreneur should be given a fresh lease of life rather than being bogged down with legal cases and criminal actions. The ‘Make in India’ campaign will only be successful if the spirit of entrepreneurship is saved — which IBC in its present form does not seem to be doing.“
The system counts money recovered. It should count companies saved, jobs preserved, patents protected, brands kept alive, and entrepreneurs given another chance. Until it does, the IBC will remain a law that punishes builders, rewards destroyers, and calls it “resolution.”
Next: Article 5 — The Entrepreneur as Criminal: When Business Failure Becomes a Death Sentence
Founder of Su-Kam and Kunwwer.ai, and mentor at Su-vastika and several other companies — the “Inverter Man of India” and the “Solar Man of India.” Read his story →