The government will be altering the insolvency code to protect new owners of bankrupt companies from criminal liabilities of the time when the firms were controlled by the outgoing promoters, reported The Economic Times, citing people familiar with the matter.

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According to the report, the Cabinet is likely to approve the required changes to the three-year-old Insolvency and Bankruptcy Code (IBC) as soon as possible.

“The government is expected to shortly seek Cabinet approval on amending the IBC that will give immunity to assets bought through the NCLT (National Company Law Tribunal) route,” one of the persons cited was quoted as saying in the report.

“This will bring much-needed confidence to buyers of distressed assets, acquirers who were otherwise wary about the over-reach of the investigative authorities," the person added.

ET had last week reported that steel major ArcelorMittal had approached the government seeking immunity from any future investigations that may happen pertaining to Essar Steel and its erstwhile promoters, the Ruia family.