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[IBBI] Disclosures By Insolvency Professionals & Other Professionals Appointed By Insolvency Professionals Conducting Resolution Processes

Insolvency and Bankruptcy Board of India issued Circular No. IP/005/2018 dated 16th January, 2018 addressed to all Registered Insolvency Professionals and all Registered Insolvency Professional Agencies, regarding 'disclosures by Insolvency Professionals and other Professionals appointed by Insolvency Professionals conducting Resolution Processes'. The contents of the circular is reproduced as under:-

1. The Insolvency and Bankruptcy Code, 2016 read with regulations made thereunder provide for appointment of an insolvency professional [(Interim Resolution Professional (IRP) / Resolution Professional (RP)] to conduct the resolution process (Corporate Insolvency Resolution Process and the Fast Track Process) and discharge other duties. These authorise the Insolvency Professional to appoint registered valuers, accountants, legal and other professionals to assist him in discharge of his duties in resolution process.

2. In the interest of transparency, it has been decided that an insolvency professional and every other professional appointed by the insolvency professional for a resolution process shall make disclosures as specified in Para 3 to 5 hereunder.

3. An insolvency professional shall disclose his relationship, if any, with (i) the Corporate Debtor, (ii) other Professional(s) engaged by him, (iii) Financial Creditor(s), (iv) Interim Finance Provider(s), and (v) Prospective Resolution Applicant(s) to the Insolvency Professional Agency of which he is a member, within the time specified as under:
Insolvency and Bankruptcy Code 2016

4. An insolvency professional shall ensure disclosure of the relationship, if any, of the other professional(s) engaged by him with (i) himself, (ii) the Corporate Debtor, (iii) Financial Creditor(s), (iv) Interim Finance Provider(s), and (v) Prospective Resolution Applicant(s) to the Insolvency Professional Agency of which he is a member, within the time specified as under:
Insolvency and Bankruptcy Code 2016

5. For the purpose of Para 3 and 4 above, ‘relationship’ shall mean any one or more of the four kinds of relationships at any time or during the three years preceding the appointment:
Insolvency and Bankruptcy Code 2016

6. An Insolvency Professional Agency shall facilitate receipt of disclosures as required above. It shall disseminate such disclosures on its web site within three working days of receipt of the disclosure. A model schematic presentation of disclosures for guidance of Insolvency Professional Agencies and Insolvency Professionals is enclosed at Annexure A.

7. The Insolvency Professional shall provide a confirmation to the Insolvency Professional Agency to the effect that the appointment of every other professional has been made at arms’ length relationship.

8. The disclosures shall be made in respect of ongoing resolution processes as on date and all subsequent resolution processes. The disclosures due on date in respect of the ongoing processes shall be made to the respective Insolvency Professional Agency by 31st January, 2018.

9. The Insolvency Professional shall ensure timely and correct disclosures by him and the other Professionals appointed by him. Any wrong disclosure and delayed disclosure shall attract action against the Insolvency Professional and the other Professional as per the provisions of the law.

10. This circular is issued in exercise of powers under section 196 read with sections 204 and 208 of the Insolvency and Bankruptcy Code, 2016, in consultation with the Insolvency Professional Agencies.



Annexure A

Disclosures by the Insolvency Professionals and other Professionals appointed by the Insolvency Professionals conducting Resolution Processes of …………………… (Corporate Debtor)
Insolvency and Bankruptcy Code 2016

Notes:

i. NA: Not Applicable.

ii. Additional rows and columns to be inserted, as required, where there are more than one professional, financial creditor, interim finance provider or prospective resolution applicant.

iii. Where an Accountant has relationship of kind A with a Financial Creditor, relevant cell will display ‘A’, as indicated in the above table. One may click on ‘A’ to find details of relationship.

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