Insolvency and Bankruptcy Board of India (IBBI) IBBI amends | UPSC Notes EPFO Labour Law
Insolvency and Bankruptcy Board of India (IBBI)
IBBI amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
The IBBI has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2016 in July 2021.
The amendment regulations enhance the discipline, transparency, and accountability in corporate insolvency proceedings.
The amendment makes the following changes:
In case a corporate debtor (CD) has changed its name or registered address before the commencement of insolvency, an insolvency professional (IP) conducting the CIRP (Corporate Insolvency Resolution Process) is required to disclose all former names and registered office address(es) so changed in the two years preceding the commencement of insolvency along with the current name and registered office address of the CD, in all its communications and records.
The amendment provides that the interim resolution professional (IRP) or resolution professional (RP) may appoint a professional other than registered valuers, if he is of the opinion that the services of such professional are required and such services are not available with the CD.
Registered valuers are appointed by the IRP/RP to assist him in discharge of his duties in conduct of the CIRP.
RPs managing the operations of distressed companies undergoing corporate insolvency proceedings will now be required to assess and report whether the company has completed any transactions to siphon off funds prior to insolvency proceedings.
RPs will be required to provide an opinion on whether the company has been subject to avoidance transactions within 75 days of the start of the CIRP.
Such provisions would allow stakeholders to claw back lost value and would disincentivise stakeholders from entering into such transactions.
