More Stories

Informist, Wednesday, Nov. 20, 2024

 

NEW DELHI – The Insolvency and Bankruptcy Board of India has proposed amendments to regulations on insolvency resolution processes for companies by making it mandatory to constitute a monitoring committee to implement resolution plans. In a discussion paper, the board proposed a framework that empowers the committee of creditors to make the final decision on the constitution, composition, and the period for the committee, as part of the resolution plan.

 

In its proposed amendments to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the board proposed that the resolution plan should provide for the constitution of a monitoring committee, which will function till the completion of the implementation of the resolution plan. The monitoring committee should consist of the resolution professional, nominees of the committee of creditors and the successful resolution applicant, with the resolution professional acting as the chairperson, the discussion paper said.

 

The monitoring committee should monitor and supervise the implementation of the resolution plan and the distribution of resolution proceeds in line with the resolution plan, the paper said. It should also look at the transfer of assets and control of the corporate debtor to the successful resolution applicant and compliance with statutory requirements during the implementation of the resolution plan, it said.

 

The paper suggested that the monitoring committee should submit quarterly reports to the adjudicating authority and the insolvency board regarding the status of the implementation of the resolution plan. The monitoring committee will seek appropriate directions from the adjudicating authority, where implementation is not in accordance with the terms and conditions of the resolution plan, the paper said. The successful resolution applicant will bear the expenses of the monitoring committee, it said.

 

The paper cited the recent Supreme Court ruling on liquidating Jet Airlines (India) Ltd. after the consortium of Kalrock Capital and United Arab Emirates-based entrepreneur Murari Lal Jalan failed to implement the resolution plan. The Supreme Court had suggested making mandatory provisions for setting up a monitoring committee once the resolution plan is approved. Presently, the constitution of a monitoring committee is not statutory in the Insolvency and Bankruptcy Code and is for the adjudicating authority to order its constitution.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.