IBBI seeks stricter norms for bidder identity check

Higher duties cast on resolution professionals

- MANU KAUSHIK

TO CURB BACKDOOR entry of past promoters and giving greater responsibility to the insolvency professionals, the Insolvency and Bankruptcy Board of India (IBBI) has asked resolution professionals (RPs) to place a detailed note on “Section 29A compliance” before the committee of creditors (CoC) when the resolution plans are considered by them.

Section 29A of the Insolvency and Bankruptcy Code (IBC) is a gatekeeper provision that lays down the ineligibility criteria for the bidders. It also ensures that those responsible for a company's failure do not get to regain control of the company through proxy bids.

Further, the IBBI circular said that the RPs will have to ensure that deliberations and observations of the CoC — at the time of submitting the Section 29A note — are properly recorded in the minutes.