IBBI Cancels 207 Insolvency Professionals Registrations For Failing 'Fit And Proper' Test In June Quarter: Report

(MENAFN- KNN India) New Delhi, Sep 10 (KNN) The Insolvency and Bankruptcy Board of India (IBBI) cancelled the registrations of 207 insolvency professionals (IPs) during the June quarter for failing to meet the 'fit and proper' criteria, marking the regulator's largest such action since its establishment in 2016, according to official data reviewed by Mint.

The latest cancellations have reduced the number of registered insolvency professionals in the country to 4,359 at the end of June. Prior to this, only 28 IPs had lost their registrations on fit-and-proper grounds since the IBBI was set up, while another 15 had forfeited their registrations following disciplinary proceedings.

The action comes amid increased scrutiny of insolvency professionals over allegations of corruption, fraud and misuse of the insolvency resolution process.

IBBI Flags Risks in Insolvency Process

Anoop Rawat, partner and national practice head (insolvency & restructuring) at Shardul Amarchand Mangaldas & Co, said the 'fit and proper' requirement acts both as a registration-stage safeguard and as an ongoing compliance obligation for insolvency professionals, Mint reported.

In a recent circular, the IBBI advised insolvency professionals to remain alert to circumstances that could indicate misuse of the resolution process. It highlighted situations where insolvency proceedings are initiated by a single creditor other than a bank or public financial institution, which subsequently gains dominance in the committee of creditors.

The regulator said the latest guidance followed concerns raised by law-enforcement agencies over possible misuse of the Insolvency and Bankruptcy Code (IBC), including attempts to mitigate tax liabilities or avoid investigations.

(KNN Bureau)

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