IBBI amends norms for setting up information utilities

The Insolvency and Bankruptcy Board today said it has amended the rules for information utilities, providing more leeway for setting up such entities.

Now, a listed Indian company can hold up to 100 per cent stake in an information utility -- which stores financial information that helps to establish defaults as well as verify claims expeditiously.

Under the Insolvency and Bankruptcy Code (IBC), information utilities have a vital role in providing financial and related details during the insolvency resolution process.

With the latest amendments, a person can, either alone or together with persons acting in concert, have a maximum of 51 per cent stake in an information utility for up to three years from the date of its registration, an official release said today.
 

Besides, an Indian company listed in India can hold up to 100 per cent of the paid-up equity share capital or total voting power of an information utility for three years from the date of inception, according to an official release.

This provision would also be applicable in cases "where no individual, directly or indirectly, either by himself or together with persons acting in concert, holds more than ten percent of the paid-up equity share capital" in an information utility.

More than half of the directors of an information utility should be Indian nationals and residents in India, as per the norms.

Prior to these amendments, a person was allowed to hold up to 51 per cent stake in an information utility for a maximum of three years.

The amendments to the IBBI (Information Utilities) Regulations are effective from September 29.

The Insolvency and Bankruptcy Board of India (IBBI) is implementing the IBC.

Under the norms, a public company with a net worth of at least Rs 50 crore is eligible to set up an information utility and among other requirements, more than half of the directors of its governing board should be independent directors.

So far, one information utility -- National E-Governance Services Ltd -- has been registered with the IBBI.