Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2022.

Disciplinary Proceedings.

Regulation  11. The disciplinary proceedings shall be conducted in accordance with the provisions of Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.

First Schedule After Clause 8A

8B. An insolvency professional shall disclose his relationship, if any, with the corporate debtor, other professionals engaged by him, financial creditors, interim finance providers, and prospective resolution applicants to the insolvency professional agency of which he is a member, within the time specified hereunder:

Relationship of the insolvency professional with  Disclosure to be made within three days of  
  
Corporate debtorhis appointment.
Registered valuers / accountants/ legal professionals/ other professionals appointed by himappointment of the professionals.  
Financial creditorsthe constitution of committee of creditors.
Interim finance providersthe agreement with the interim finance provider
Prospective resolution applicantsthe supply of information memorandum to the prospective resolution applicant
If relationship with any of the above, comes to notice or arises subsequentlyof such notice or arising.

8C. An insolvency professional shall ensure disclosure of the relationship, if any, of the other professionals engaged by him with himself, the corporate debtor, the financial creditor, the interim finance provider, if any, and the prospective resolution applicant, to the insolvency professional agency of which he is a member, within the time specified as under:

Relationship of the other professional withDisclosure to be made within three days of
 (2)
Insolvency professionalthe appointment of the other professional
Corporate debtorthe appointment of the other professional
Financial creditorsconstitution of committee of creditors.
Interim finance providersthe agreement with the interim finance provider or three days of the appointment of the other professional, whichever is later.
Prospective resolution applicantsthe supply of information memorandum to the prospective resolution applicant or three days of the appointment of the other professional, whichever is later.
If relationship with any of the above, comes to notice or arises subsequentlyof such notice or arising.

Explanation: For the purposes of clause 8B and 8C above, ‘relationship’ shall mean any one or more of the following four kinds of relationships at any time or during the three years preceding the appointment of other professionals:

Kind of relationshipNature of relationship
(1)(2)
AWhere the insolvency professional or the other professional, asthe case may be, has derived 5% or more of his / its gross revenue in a year from professional services to the related party.
BWhere the insolvency professional or the other professional, as the case may be, is a shareholder, director, key managerial personnel or partner of the related party.
CWhere a relative (spouse, parents, parents of spouse, sibling of self and spouse, and children) of the insolvency professional or the other professional, as the case may be, has a relationship of kind A or B with the related party.
DWhere the insolvency professional or the other professional, as the case may be, is a partner or director of a company, firm or LLP, such as, an insolvency professional entity or registered valuer, the relationship of kind A, B or C of every partner or director of such company, firm or LLP with the related party

15 Information Management

“15A. An insolvency professional shall prominently state in all his communications to a stakeholder, his name, address, e-mail, registration number and validity of authorisation for assignment, if any, issued by the insolvency professional agency of which he is a member.”

25 Remuneration and Cost

25B. An insolvency professional shall raise bills or invoices in his name towards his fees, and such fees shall be paid to him through banking channel.

25C. An insolvency professional shall ensure that the insolvency professional entity or the professional engaged by him raises bills or invoices in their own name towards their fees, and such fees shall be paid to them through banking channel.

27A. An insolvency professional shall, while undertaking assignment or conducting processes, exercise reasonable care and diligence and take all necessary steps to ensure that the corporate person complies with the applicable laws.

27B. An insolvency professional shall not include any amount towards any loss, including penalty, if any, in the insolvency resolution process cost or liquidation cost, incurred on account of non-compliance of any provision of the laws applicable on the corporate person while conducting the insolvency resolution process, fast track insolvency resolution process, liquidation process or voluntary liquidation process, under the Code.

About the Author

Leave a Reply

Your email address will not be published. Required fields are marked *

You may also like these

Skip to content