The Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) suspended an Insolvency Professional (IP), Poonam Basak, on the ground of non-counting votes of two major the Committee of Creditors (CoC) members i.e. Union Bank of India and Bajaj Finserv.
The issue was where the two CoC members raised the issue that their votes were not included and Poonam Basak assured them that she had already raised this concern with the e-voting vendor and will update the CoC on the outcome. Further, if possible, voting lines will be re-opened in case there are any technical errors at the vendor’s end.
However, it is observed that no action was taken by Ms. Poonam Basak to resolve the issue and she subsequently, filed a liquidation application before Adjudicating Authority (AA) on completion of 270 days without consulting the CoC members or conducting any further CoC meetings allowing the CoC members to exercise their voting in this regard.
The Insolvency Professional submitted that the inordinate delay was made in the process of resolving the appointment of a new RP along with the other resolutions, for which the members of the CoC would collectively be held accountable. Ms. Poonam Basak also stated that upon receipt of the consent from the proposed RP, she held a conference call with the members of the CoC, agreeing to the resolutions that were to be put in for e-voting.
A Single Member Bench of the Board comprising Ravi Mittal, Chairperson IBBI, observed that “Poonam Basak has contravened provisions of Code and Regulation framed thereunder by not counting the votes of two major CoC members i.e. Union Bank of India and Bajaj Finserv Ltd having 18.1% and 14.7% voting share respectively, for replacement of her as RP. It is to be noted that one of the members of the CoC having 56.1% had voted in favour of replacement of RP.”
Had the vote of either or both of the CoC member(s) i.e. UBI or Bajaj Finserv Ltd. been counted, Ms. Poonam Basak would have been replaced. The erroneous voting has benefitted Ms. Poonam Basak and served her personal interest. Due to her misconduct, the CoC members were constrained to approach the AA for replacement of RP and extension of Corporate Insolvency Resolution Process (CIRP) period.
“In view of the above, the DC holds that Ms. Poonam Basak has grossly failed to act as per the objective and mandate of the Code i.e., resolution and CoC as decision making body. Thus, the DC, in exercise of the powers conferred under section 220(2) of the Code read with IBBI (Insolvency Professionals) Regulations, 2016 and the IBBI (Inspection and Investigation) Regulations, 2017, hereby, suspends the registration of Ms. Poonam Basak” the Board concluded.
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