The Insolvency and Bankruptcy Board of India (IBBI) has suspended an insolvency professional for two years due to the lack of consultation with the Stakeholders Consultation Committee (SCC) and for non-compliance with regulatory oversight during a significant sale involving ₹507.2 crore.
IBBI Issues Suspension for Regulatory Non-Compliance
The Insolvency and Bankruptcy Board of India (IBBI) has suspended an insolvency professional for two years after determining that he bypassed required consultations with the Stakeholders Consultation Committee (SCC) during a sale of BRG Iron & Steel Private Limited, valued at ₹507.2 crore. This ruling highlighted the professional's undue haste and failure to adhere to regulatory frameworks.
In its findings, IBBI noted repeated non-compliance with prescribed oversight mechanisms, which are crucial for maintaining procedural integrity in insolvency resolutions. The suspension reinforces the importance for insolvency professionals to rigorously follow existing statutory guidelines, especially when handling substantial asset sales.
This decision serves as a stark reminder that insolvency professionals must ensure engagement with SCCs and comply with all regulatory requirements. Legal practitioners advising clients in insolvency matters should heed this ruling to avert potential sanctions and ensure robustness in insolvency processes.
Citations
- IBBI Order (2026) IBBI No. 1451153
