The Insolvency and Bankruptcy Board of India (IBBI) has amended the corporate insolvency resolution process regulations to ensure that applicants, including promoters, are put to a stringent test with respect to their credit worthiness and credibility.
The amendment also imposes greater responsibility on the resolution professional and the Committee of Creditors in discharging their duties.
The amendments will ensure that as part of due diligence prior to approval of a resolution plan, the antecedents, credit worthiness and credibility of a resolution applicant, including promoters, are taken into account by the Committee of Creditors, an official statement said on Tuesday.
To ensure that the corporate insolvency resolution process results in a credible and viable resolution plan, the IBBI has carried out amendments to the IBBI (Insolvency Resolution Process for Corporate Persons) Resolution Process, 2016 (CIRP Regulations), it said.
The revised regulations make it incumbent upon the resolution professional to ensure that the resolution plan presented to the Committee of Creditors contains relevant details to assess the credibility of the resolution applicants.
The details to be provided would include details with respect to the resolution applicant in terms of convictions, disqualifications, criminal proceedings, categorisation as willful defaulter as per RBI guidelines, debarment imposed by SEBI, if any, and transaction, if any, with the corporate debtor in the last two years.
The resolution professional has to also submit details in respect of transactions covered under the provisions relating to undervalued transactions, extortionate credit transactions and fraudulent transactions, under the Insolvency and Bankruptcy Code.
