The Insolvency and Bankruptcy Board of India’s (IBBI) latest discussion paper on fraudulent or malicious initiation of the Corporate Insolvency Resolution Process (CIRP) has placed a new responsibility on insolvency professionals (IPs) which includes identifying potential abuse of the insolvency process, conducting due diligence and, where warranted, approach the adjudicating authority under Sections 60(5) and 65 of the Insolvency and Bankruptcy Code (IBC).
“Recently, the Board has received information from law-enforcement and regulatory agencies indicating that the CIRP framework is being misused in a few cases.…IPs, given…