IBBI Directs Resolution Professionals To Submit Detailed Section 29A Compliance Notes To CoC

New Delhi, Nov 20 (KNN) The Insolvency and Bankruptcy Board of India (IBBI) has directed resolution professionals (RPs) to furnish detailed notes on bidders’ compliance with Section 29A of the Insolvency and Bankruptcy Code (IBC) when resolution plans come up for consideration before the Committee of Creditors (CoC). 

The move is aimed at strengthening due diligence and preventing ineligible or unscrupulous entities from participating in the insolvency process.

In a circular issued on November 18, the regulator emphasised that rigorous scrutiny of Section 29A requirements is essential to maintaining the integrity of the resolution framework. 

“Due diligence with respect to section 29A compliance is paramount as it safeguards the integrity of the process by ensuring that only credible resolution applicants participate in the process. It also reduces the risk of legal challenges post-approval of the resolution plan,” the circular noted.

Section 29A specifies the grounds on which applicants may be barred from bidding, including restrictions on promoters of companies undergoing insolvency proceedings. 

Both RPs and prospective applicants must meet various compliance obligations under the IBC, such as submitting an undertaking at the Expression of Interest (EoI) stage confirming eligibility.

Against this backdrop, IBBI has instructed RPs to prepare and place a comprehensive note on Section 29A compliance before the CoC and ensure that the committee’s discussions and observations are accurately reflected in the meeting minutes. 

The directive forms part of the regulator’s broader efforts to enhance the credibility, transparency, and robustness of India’s time-bound, market-driven insolvency resolution system.

(KNN Bureau)