New Delhi: The bankruptcy regulator has called on insolvency professionals (IPs) to be watchful of at least nine “indicators”-including the initiation of resolution process involving firms with no or negligible operations and assets, and such entities with substantial loans to or from related parties-to curb any potential abuse of law. The move, experts said, would discourage any unintended “weaponisation” of the Insolvency and Bankruptcy Code (IBC) by vested interests.
The move follows inputs from law-enforcement and other regulatory agencies indicating “that the CIRP (corporate insolvency resolution process) framework is, in certain cases, being resorted to with malafide intent,” the Insolvency and Bankruptcy Board of India (IBBI) said…