Not all information is available as RP himself is struggling to manage business, says Tata Steel CFO

Koushik Chatterjee, chief financial officer of Tata Steel — one of the first companies to successfully acquire a stressed asset under the Insolvency and Bankruptcy Code (IBC) — said due diligence before acquiring an asset remains a key challenge under the bankruptcy law.

“Due diligence is a challenge. The issue is that in an IBC asset you would not get everything – not all the information, not all the access, as the resolution professional is himself struggling in managing the business and is not an industry person in many cases,” Chatterjee said on Thursday, speaking at an event organised by the Confederation of Indian Industry (CII).

Chatterjee said due diligence, a process during which a prospective acquirer takes stock of the asset by looking at company data, walking around sites and doing third-party diligence, is one of the most critical areas of any merger and acquisition activity but is often considered customary and left to advisers to carry out. “There has to be about 45% of senior leadership engagement in the process,” said Chatterjee.