 "Bankruptcy Code: IBBI can initiate probe against insolvency professionals")
The Insolvency and Bankruptcy Board of India (IBBI) has powers to start probe against service providers registered with it without intimating them, according to new regulations.
IBBI, which is implementing the Insolvency and Bankruptcy Code (IBC), has notified the regulations for inspection and investigation of service providers registered with it.
Insolvency professional agencies, professionals, entities and information utility are considered as service providers under the Code.
The Code, which provides for a market-determined and time-bound resolution of insolvency proceedings, became operational in December 2016.
As per the regulations, the investigation authority has to serve a notice intimating the entity concerned about the probe at least ten days in advance.
However, the requirement could be done away with on grounds such as apprehensions that the records of the particular service provider might be destroyed before the probe starts.
"... Where the investigating authority is satisfied that the notice will cause undue delay in investigation or there is an apprehension that records of the service provider may be destroyed, mutilated, altered, falsified or secreted, after the notice is served, it may, for reasons to be recorded in writing, dispense with such notice," the regulations said.
Among others, the investigating authority has powers to seize records of the service provider being probed through a court order.
The investigating authority can be one officer or a team of officers of the IBBI.
"Inspection and investigation are important regulatory functions. These need to be carried out in a disciplined manner without infringing upon the rights of entities (who are) being inspected or investigated," IBBI chairperson M S Sahoo told PTI.
There are more than 500 registered IP professionals besides three IP agencies and around 18 IP entities, data available with the IBBI showed.
IP entities are generally limited companies or limited liability partnerships registered with the IBBI.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
