The Securities Exchange Board of India ( SEBI ) has authorized the Insolvency Professionals to act as Administrators.
Through the SEBI (Appointment of Administrator and Procedure for Refunding to the Investors) Regulations, 2018, SEBI has put in place the revised norms for recovering of investors’ money, wherein a registered insolvency professional will be appointed as administrator to undertake the sale of assets.
The SEBI has also revised the procedures to be followed for refunding the investors’ money pursuant to failure of complying with disgorgement or refund orders passed by it. This would eventually benefit the Chartered Accountants profession.
In case an entity is not traceable or is not complying with the SEBI directives, the recovery officer can appoint an administrator for selling the properties attached, the regulator said in a notification dated 3rd October 2018.
Only a person registered with the IBBI as insolvency resolution professional would be considered eligible for the appointment as administrator. Further, it was mentioned that the administrator shall provide an undertaking to the Board of absence of any conflict of interest with the defaulter, its directors, promoters, key managerial personnel and its group entities. Also, an administrator can engage the services of a peer-reviewed Chartered Accountant to verify the claims of investors based on the documentary evidences.
The President of the Institute of Chartered Accountants of India (ICAI) has expressed immense pleasure in communicating the SEBI’s move to the Members.