Valuation Conducted Beyond Prescribed Timelines is violative of Insolvency Bankruptcy Code: IBBI suspends Registration of IP [Read Order]
Valuation – Prescribed – violative – Insolvency -Bankruptcy- Code-IBBI – Registration – IP-TAXSCAN
Valuation – Prescribed – violative – Insolvency -Bankruptcy- Code-IBBI – Registration – IP-TAXSCAN
The Insolvency and Bankruptcy Board of India (IBBI) has valuation conducted beyond prescribed timelines is violative of Insolvency Bankruptcy Code and suspended the registration of Insolvency Professional.
Mr Sutanu Sinha is the Insolvency Professional (IP) under section 220 of the Insolvency and Bankruptcy Code, 2016 read with regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017.
The Liquidator Mr Sutanu Sinha had prescribed a nonrefundable participation fee of Rs.25 lakh in addition to the Earnest Money Deposit (EMD) of Rs.5 crore in the e-auction process held on 04.10.2019 during the liquidation. In the e-auction dated 21.07.2021 too, Mr Sutanu Sinha prescribed the non-refundable participation fee of Rs.25 lakh, in addition to the EMD of Rs.50 crore.
The liquidation order was passed 26.07.2019, by the AA read with order dated 31.07.2019. However, Mr Sinha had appointed valuers namely M/s RNC Valuecon LLP and Protocol Valuers Private Limited to conduct the valuation of the CD vide engagement letters dated 17.11.2021, i.e. after more than two years of the liquidation commencement date.
The Disciplinary Committee (DC) found that there is inconsistency in conducting the auctions during the liquidation period. Additionally, the valuation was conducted beyond the prescribed timelines and the reserve price for the auction was reduced beyond the permissible limits under the Liquidation Regulations.
Furthermore, there is a lack of objectivity, transparency, justification and reasonableness in the fixation on the fee of IPE as support services. The Disciplinary Committee, in the exercise of the powers conferred under section 220 (2) of the Code read with Regulation 13 of the Inspection Regulations suspended the registration of Mr Sutanu Sinha having registration No. IBBI/IPA-003/IP-N00020/2017-2018/10167 for a period of one year.
To Read the full text of the Order CLICK HERE
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