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Insolvency and Bankruptcy Board sets up two advisory committees

The Insolvency and Bankruptcy Board of India (IBBI) has set up two high-level advisory committees to gather inputs from experts, including on service providers and corporate liquidation.

IBBI has been set up under the Insolvency and Bankruptcy Code, 2016 and is expected to soon operationalize. The two committees have begun their deliberations.

Key Facts

  • The advisory committee on services: It will be headed by educationist Mohandas Pai. It includes National Stock Exchange Vice-Chairman Ravi Narain, SEBI Executive Director J Ranganayakulu, National Institute of Public Finance and Policy’s Professor Ajay N Shah and senior lawyer Amarjit Singh Chandiok.
  • The advisory committee on corporate insolvency and liquidation: It will be headed by noted banker Uday Kotak. It includes Credit Information Bureau Chairman M V Nair, Corporate and Economic Research Group Advisory’s Chairperson Omkar Goswami and BSE CEO Ashishkumar Chauhan.

About IBBI

  • IBBI seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
  • It has been set up by the code to regulate professionals, information utilities (IUs) and agencies engaged in the resolution of insolvencies of companies.
  • It has chairman and 10 members. Present chairman is M S Sahoo. There four government-nominated members.

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IBBI notifies two regulations under Bankruptcy Code

The Insolvency and Bankruptcy Board (IBBI) of India has notified two regulations in exercise of its powers conferred under section 240 of Insolvency and Bankruptcy Code, 2016.

The Insolvency and Bankruptcy Code, 2016 seeks to ensure time-bound settlement of insolvency, faster turnaround of businesses and create a unified database of serial defaulters.

These two regulations are IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016; IBBI (Insolvency Professional Agencies) Regulations, 2016.

Key Facts

  • The two regulations provide (i) eligibility norms to be a Professional Member of an Insolvency Professional Agency (IPA) and (ii) norms to get registered with IBBI as an Insolvency Professional Agency.
  • It allows company registered under Section 8 of the Companies Act, 2013 having a minimum net worth of Rs. 10 crore to be eligible for an IPA.
  • The IPA should have over half of its Directors as independent directors and not more than one-fourth of the Directors can be insolvency professionals.
  • It shall have Monitoring Committee, Membership Committee(s), Disciplinary Committee(s) and Grievance Redressal Committee(s) for the purposes of regulation and oversight of professional members.

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MS Sahoo takes charge as Chairman of Insolvency and Bankruptcy Board of India

The Union Finance Ministry constituted four-member Insolvency and Bankruptcy Board of India (IBBI) with Financial markets expert MS Sahoo as its Chairman.

MS Sahoo was administered the oath of the office by Union Finance and Corporate Affairs Minister Arun Jaitley in New Delhi. He will have tenure of five years i.e. till 2021.

Prior to this appointment, he was serving as a member of anti-trust regulator Competition Commission of India (CCI). Earlier he also had served as member at capital markets regulator Securities and Exchange Board of India (SEBI). He also had served as Chairman of the government-appointed committees on depository receipts, domestic and overseas capital markets, and external commercial borrowing (ECBs).

Other members of IBBI: Ajay Tyagi (Additional Secretary, Union Finance Ministry) Amardeep Singh Bhatia (Joint Secretary, Union Ministry of Corporate Affairs), GS Yadav (Joint Secretary, Department of Legal Affairs) and Unnikrishnan (Legal Advisor of the Reserve Bank of India).

About Insolvency and Bankruptcy Board of India (IBBI)

  • IBBI has been tasked to regulate functioning of insolvency professionals, insolvency professional agencies and information utilities under Insolvency and Bankruptcy Code 2016.
  • The Code was notified by the Union Government in May 2016 replacing existing bankruptcy laws.
  • It seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, individuals and partnership firms in a time-bound manner.
  • Under this new law, employees, creditors and shareholders will have powers to initiate winding up process at first sign of financial stress such as serious default in repayment of bank loan.

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