SUSPENDED AMMUNITION

With the insolvency and bankruptcy law suspended, the ecosystem of professionals around it faces disruption and uncertainty

- DIPAK MONDAL

3,009 registered insolvency professionals

69 registered insolvency professional entities

3,030 registered valuers

1 Information Utility

Source: IBBI Date as of 31 March 2020

The government's move to suspend the insolvency and bankruptcy law for six months to one year has put stakeholders of the insolvency regime in a bind. Many of them – insolvency professionals (IPs), insolvency professional entities (IPEs), valuers, lawyers and others – face uncertain times.

An IPE is a legal entity of IPs, who are its partners/ directors. Its objective is to provide support services to IPs, who run companies under insolvency and are appointed by the Committee of Creditors. Many of these professionals/entities have invested a lot in creating infrastructure, systems and networks to deal with insolvency cases. Over the last four years – the Insolvency and Bankruptcy Code (IBC) came into effect in June 2016 – thousands of professionals, including chartered accountants (CAS), company secretaries, lawyers and other professionals, have launched exclusive insolvency law-related practices. Many accountancy, company secretary and law firms have also created wings to deal with insolvency matters.

In fact, India has 3,009 registered IPs, around 69 IPEs, 3,030 registered valuers and 29 valuer entities. Besides, there is an Information Utility, which collects financial information about a corporate entity and gets it authenticated by various sources, and a host of lawyers, auditors and other professionals directly or indirectly linked to the IBC.

This entire ecosystem is staring at a disruption in case the insolvency law is suspended for a year.