The Insolvency and Bankruptcy Board of India ( IBBI ) has expressly prohibited the empanelment of Insolvency Professional Entities with market participants.
“It has been observed that a few market participants are seeking empanelment of IPEs and a few IPEs are seeking empanelment with market participants. Given the role of an IPE, the IPEs are directed to refrain from seeking empanelment with or joining any panel of any market participant.,” an IBBI missive said on Friday.
Section 206 of the Insolvency and Bankruptcy Code, 2016 prohibits a person from rendering services as an insolvency professional (IP) unless he is: (a) enrolled as a member of an Insolvency Professional Agency (IPA), and (b) registered with the Insolvency and Bankruptcy Board of India (IBBI). Thus, no person other than a person registered as an IP with the IBBI can render services as an IP.
“An IPE is neither enrolled as a member of an IPA nor registered as an IP with the IBBI. It cannot act as IP under the Code,” the circular said.
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