Bankruptcy Board Amends Norms To Make Insolvency Process Transparent

Ministry of Corporate Affairs said that the changes will bring in greater discipline and transparency in insolvency proceedings.

In order to bring greater clarity and transparency in the insolvency process, the Insolvency and Bankruptcy Board of India (IBBI) has effected changes in the regulations meant for corporate insolvency proceedings, under which a resolution professional will have to give details of his or her opinion on avoidance transactions linked to a corporate debtor. IBBI has done this by amending the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations. A statement issued by the Ministry of Corporate Affairs on Wednesday said that the changes will bring in greater "discipline, transparency, and accountability in corporate insolvency proceedings". A resolution professional is duty-bound to find out if a Corporate Debtor (CD) has been subject to avoidance transactions, namely, preferential transactions, undervalued transactions, extortionate credit transactions, fraudulent trading and wrongful trading, and file applications with the adjudicating authority seeking appropriate relief, the statement added.