IBBI strengthens norms for resolution plan approval

New Delhi [India], November 7 (ANI): The Insolvency and Bankruptcy Board of India (IBBI) on Tuesday amended its corporate insolvency resolution process regulations to 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 (CoC).

With a view to ensure that the corporate insolvency resolution process results in a credible and viable resolution plan, the IBBI has carried out amendments to the Insolvency Resolution Process for Corporate Persons Resolution Process, 2016 (CIRP Regulations).

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

This would include resolution applicant's details 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.

Apart from the above, the resolution professional has to also submit details in respect of transactions observed or determined, if any, covered under Section 43 (Preferential Transactions); Section 45 (Undervalued Transactions); Section 50 (Extortionate Credit Transactions); Section 66 (Fraudulent Transactions) under Insolvency and Bankruptcy Code, 2016. (ANI)