Insolvency Professionals Face Challenges from Statutory Authorities: Survey

New Delhi, Jul 3 (PTI) Insolvency professionals spend significant time in dealing with issues related to statutory authorities and enforcement agencies during insolvency resolution process, according to a survey.

The survey was conducted by the Indian Institute of Insolvency Professionals of ICAI (IIIPI) and saw the participation of around 30 Insolvency Professionals (IPs).

As per the findings released on Wednesday, the challenges faced by IPs include initiation of statutory/penal proceedings against Corporate Debtors (CDs) despite onset of moratorium, summons or notices being sent to IPs for civil and criminal matters or acts or omissions pertaining to period prior to commencement of CIRP.

CIRP refers to Corporate Insolvency Resolution Process.

During insolvency resolution process, IPs spend significant time and efforts in dealing with issues related to statutory authorities and enforcement agencies. In some cases, the time taken in responding or interfacing with such authorities/agencies, goes up to 25 per cent of timelines under IBC process, the survey said.

The Insolvency and Bankruptcy Code (IBC) provides for a time-bound and market-linked resolution of stressed assets.

"While statutory authorities and enforcement agencies expect timely conclusion of their proceedings/claims against the CDs, IPs experience the practical difficulties in responding to them, for matter which are prior to commencement of CIRP, or where past records are not available/handed over to RP, or where only promoters/ex-management are accountable," IIIPI Board's Chairman Ashok Haldia said.