IBBI takes action against 12 insolvency professionals so far this year

livemint.com:

Mint reached out to all 12 professionals against whom disciplinary orders were issued this year. One them alleged the order was “arbitrary" while another questioned the way IBBI uses its power. In yet another case, involving the suspension of registration for two years, the professional has moved the Madras High Court initiating contempt of court proceedings against IBBI officials.

Mint has seen a copy of the petition. One professional, who spoke on condition of anonymity, said disposing of the show cause notice issued by the regulator in the disciplinary matter took too long and the order was arbitrary. The professional said that during the pendency of a show cause notice, professionals are not allowed to take up fresh assignments as resolution professionals or as liquidators.

Due to a delay in issuing the final order, the professional in this case allegedly had to let go many assignments. In this case, the creditors approved the resolution plan prepared by the resolution professional and had also confirmed the appointment of the professional as the administrator of the company. Eventually, the disciplinary order advised caution to the professional in handling assignments and suggested full compliance with the Bankruptcy Code.

Another professional, who also spoke on condition of anonymity, questioned the qualifications of the officials involved in the disciplinary proceedings. Emails sent to the other professionals seeking comments for the story remained unanswered at the time of publishing. The regulator’s focus on taking strong disciplinary action comes in the context of the government’s efforts to clean up the corporate and financial sector balance sheets, which is seen as vital for a fresh investment cycle.