November 9, 2017:

Stricter rules have been put in now place for the approval process of resolution plans submitted under the insolvency law.

The Insolvency and Bankruptcy Board of India (IBBI) has amended its corporate insolvency resolution process regulations under Insolvency and Bankruptcy Code, 2016 (IBC).

Govt. in it notification stated that,”It will ensure that as part of the due diligence, prior to the approval of a resolution plan, antecedents, credit worthiness and the credibility of a resolution applicant, including the promoters, are taken into the account by Committee of the Creditors (CoC).

With a view to ensure that the Corporate Insolvency Resolution Process results in a credible and viable resolution plan, IBBI has carried-out the amendments to Corporate Insolvency Resolution Process (CIRP).

Revised regulations make it incumbent upon resolution professional to ensure that plan presented to CoC contains relevant details to assess credibility of applicants.

Resolution applicant’s need to provide the details in the terms of the convictions, disqualifications, criminal proceedings, categorization as willful defaulter as per the RBI guidelines, debarment imposed by market regulator SEBI, if any, and the transaction, if any, with corporate debtor in last two years.

Apart from this, Resolution professional need to submit the details in respect of the transactions observed or determined, if any, covered under the Section 43 (Preferential Transactions); Section 45 (Undervalued Transactions); Section 50 (Extortionate Credit Transactions); Section 66 (Fraudulent Transactions) under the Bankruptcy Law.

Through this, Resolution applicants are put to a stringent test with respect to their credit worthiness and the credibility.

Further, it also imposes greater responsibility on resolution professionals and CoC in discharging their duties.

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Source - ptinews.com