Regstreet Law Advisors

IPs & IPAs

1. Insolvency regulator issues orders, denies one Insolvency Professional registration

Within a short span of five months of its establishment, Dr. M. S. Sahoo, Chairman of IBBI has issued two regulatory orders. The orders have been issued in respect of applications under Regulation 6 of IBBI (Insolvency Professionals) Regulations, 2016 (“the Regulations”) for registration as an Insolvency Professional (“IP”). These applications were filed by the Assistant Vice President of Ernst and Young, and a former company secretary of M/s Zenith Birla (India) Limited. Both the applications were rejected and it was held that, for meeting the conditions for registration, an IP should be fit and proper person, abiding by the Code of Conduct at all times and must not ‘engage in any employment’. These historic orders from IBBI set a tone on how it is going to interpret the provisions of its Regulations. Where the code of conduct forms part of the Regulation, the violation of the code of conduct, will become punishable for violation of Regulations and hence both have to be read together.

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