On 4-7-2022, Insolvency and Bankruptcy Board of India (IBBI), notified Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2022. With immediate effect it amends Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016. Through this regulation, the professionals that conduct the resolution of insolvency of any third person are obliged to make it impartial, paying the costs incurred, managing their information with the Board.
Key Amendment:
Regulation 8B, extends the provisions of impartiality on the part of ‘Insolvency Professionals', he is required to disclose his fiduciary ‘relationship' with any debtors, professionals engaged, financial creditors, Interim Finance providers, etc. This disclosure must be revealed within 3 days.
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‘Relationship' of Insolvency Professional, has been clearly explained under Regulation 8C, if-
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He has derived 5% or more of his/its gross revenue in a year from professional services to the related party.
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He is a shareholder, director, key managerial personnel or partner of the related party.
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His relative has a relationship with the above-mentioned.
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He is a partner or director of a company, firm or LLP, such as, an insolvency professional entity or registered valuer.
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All the communication and contact details of the professional provided by the professional agency are to be submitted as per the provisions of Regulation 15A.
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With Regulation 25A, Insolvency Professional will have to raise bill in his name and thereafter, such payment will be made to him through banking channel.
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To undertake the assignment or conducting processes, reasonable care and diligence must be ensured that the corporate person complies with the applicable laws under Regulation 27A.
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Disciplinary proceedings will now be conducted as per Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.
*Shubhi Srivastava, Editorial Assistant has reported this brief.
