Creditor Control and Shareholder Return: Rethinking Corporate Governance Across Insolvency and Securities Law

Document Type

Research Article

Abstract

India's corporate governance framework suffers from "structural circularity" due to conflicting legal regimes. During financial distress, the Insolvency and Bankruptcy Code (IBC) shifts total control from shareholders to the Committee of Creditors (CoC). Yet, post-insolvency, the firm must abruptly return to the shareholder-centric oversight of the SEBI LODR Regulations, creating major regulatory conflict. This paper highlights systemic frictions in related-party transactions (RPTs), minimum public shareholding (MPS), and disclosure rules. To resolve this, it proposes a "distress-contingent governance" framework that uses dynamic, transitional norms tailored to a firm’s financial stage.

Publication Date

2026

Journal

Journal on Corporate Law and Governance, National Law University, Jodhpur

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