IBBI has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Individuals) Regulations. An official release issued on Wednesday said the amendments to the regulation are aimed at “increasing discipline, transparency and accountability in corporate insolvency proceedings”.
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According to the statement, a resolution professional is duty bound to ascertain whether a corporate debtor (CD) is subject to avoidance transactions, i.e. whether he is involved in low value transactions, extortionate loan transactions, fraud and wrongful trading.
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This not only brings back the lost value in such transactions, but also increases the possibility of restructuring the corporate debtor through a resolution plan and also discourages such transactions.
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