CAIRR Update July 5, 2022

• All disclosures, under Regulation 46 and 62 of Listing Regulations to be under a separate section as mentioned below:
  • Home > Investors > Disclosures under Reg 46 of the LODR > details required under Reg 46 (2)
  • Home > Investors > Disclosures under Reg 62 of the LODR > details required under Reg 62 (1)
• Updated Policies with effective/ last amended date.

2. IBBI amends the procedure for violation of the IB Code for Insolvency Professionals (IPs) and Insolvency Professional Agencies (IPAs)

• IBBI may authorize an Investigating Authority to issue Show Cause Notices in writing to the IP or IPAs with the following details:
  • alleged facts, evidence obtained, actions proposed to be taken, the time within which a response is required ( at least 15 days) and consequences of failure to do so.
• This notice shall be served in both electronic form to the email addresses and by registered post.
• All the relevant information will then be placed before a Disciplinary Committee to which the case is referred.

3. IBBI amends Schedule I of the Insolvency Professionals Regulations 2017 regarding the Code of Conduct for IPs

Highlights of the Code:

• An IP shall disclose his relationship* with the corporate debtor (CD), other professionals engaged by him, financial creditors, interim finance providers, and prospective resolution applicants to the insolvency professional agency of which he is a member, within three days of relationship being established as detailed in the regulation.
• An IP shall ensure disclosure of the relationship* of other professionals engaged by him with himself or the corporate debtor, within three days of relationship being established as detailed in the regulation.

*Relationship can be defined as :

1. Is a shareholder, director, key managerial personnel or partner of the related party.
2. Where a relative (spouse, parents, parents of spouse, sibling of self and spouse, and children), has a relationship of kind 1 or 2 with the related party.
3. Is a partner or director of a company, firm or LLP that has the relationship of kind 1, 2, 3 with the related party.
4. Every partner or director of such company, firm or LLP that has a relationship of kind 1, 2,3 with the related party.

• An IP shall ensure the following steps are taken by him, and on his instruction by other professionals appointed by him:

1. Timely and correct disclosures of appointments made and whether they were on arms’ length basis.
2. Invoices towards fees are raised in his name and paid through banking channel.

• An IP shall also ensure that:

1. The CD complies with the applicable laws by exercising diligence.
2. All communications to a stakeholders state his name, address, e-mail, registration number and validity of authorisation for assignment, issued by the insolvency professional agency of which he is a member.
3. The liquidation cost arrived at under the Code does not include any losses/penalty due to any non-compliance.