In a statement issued here today, Federation of Indian Chambers of Commerce and Industry (FICCI) said the definition of "sick" company under the Sick Industrial Companies (Special Provisions) Act (SICA) needs to be changed to enable a quicker turnaround. "It is important to make a provision in SICA for voluntary reference to the BIFR by companies when they feel they have become sick or are on the verge of sickness," FICCI said in a statement here today.

Companies are the best judges of their own financial health, it said. "However, their decision to approach the BIFR should be fully approved by the two-third majority of shareholders," FICCI said.

"Secured creditors like banks and financial institutions should also be permitted to refer a sick company to BIFR,going by norms relating to non-performing assets of the sick company," the chamber said.

Also, in order to make the functioning of BIFR more competent and effective, FICCI proposed an overhaul in the board's constitution. "The BIFR board should be strengthened by inducting members who are experts in different fields," the chamber said.

"BIFR also needs to decentralise so that there are autonomous benches in major industrial locations," FICCI said in its statement. Its offices, well equipped with trained staff and other infrastructural facilities should be set in different regions, it said. "The board should operate as an autonomous corporation and not as a bench of the court," it said.

There should be regular upgrading of human resources and skills within the BIFR secretariat by inviting experts to conduct workshops and seminars on appraisals, cash flow analysis, industrial and corporate law, FICCI added.

"In order to effectively tackle the problem of sickness, BIFR should be given mandatory powers sothat it can order concerned agencies to implement the rehabilitation package, agreed upon by them, within the prescribed time," the chamber suggested.

Also, the procedure followed by BIFR in perusing the case of a sick company should be time-bound, it said. "The entire procedure for rehabilitation of a sick company should be completed within three months of the case being filed with BIFR," FICCI suggested. The chamber said that SICA should sufficiently arm itself with powers to allow sick companies to dispose of surplus land for overcoming financial constraints.