Corporate Law Daily – Editorial Team
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In the instant case, Hon'ble NCLT issued Show Cause Notice (SCN) to Mr. Jaswant Singh, who was a Professional Member of the ICSI and an Insolvency Professional (IP) registered with the IBBI. ?
He was appointed as an Interim Resolution Professional (IRP) in the corporate insolvency resolution process (CIRP) of Fourth Dimension Solutions Limited (Corporate Debtor). He was replaced by Ms. Pooja Bahry as Resolution Professional (RP). ?
The IBBI issued the SCN to Mr. Jaswant Singh as he had outsourced his primary duty in engaging an independent professional, Kumar Mukesh & Associates, Company Secretaries for verification of claims and also included costs incurred in verification of claims separately in CIRP cost which was in contravention of provisions of section 18(1)(g) and section 208(2)(a) and (e) of the Code, read with regulation 13(1) of CIRP Regulations. ?
Mr. Singh in his submission said that Corporate Debtor was listed entity having turnover in Crores. It was a big size running organisation having large numbers of stakeholders. Therefore, Mr. Singh felt that there might be huge quantum of claims and respective documents submitted by the stakeholders during the CIRP. Therefore, to discharge the duties of IRP and to complete the process of CIRP promptly with the best interest of stakeholders, he sought assistance from an independent professional. ?
Mr. Singh also submitted that his intention was not to delegate his duties to others but only to take assistance in aforesaid activities and the independent professional had no other role in the verification process. He also submitted the mail prrofs that he was personally involved in the verification of claims. ?
Therefore, Mr. Singh submitted that there was no contravention of section 18(1)(b) of the Code, regulation 13 (1) of the CIRP Regulations. ?
The Disciplinary Committee (DC) found that Mr. Singh had outsourced his primary duty in engaging an independent professional for verification of claims which is clear from the terms of engagement letter defining the scope of work, despite the clarification provided by IBBI Circular no. IP/003/2018 dated 3rd January, 2018 relating to "Insolvency professional not to outsource his responsibilities" clarifies that: ?
"3. It is hereby directed that an insolvency resolution professional shall not outsource any of his duties and responsibilities under the Code." ?
Further, he included the expense of Rs. 85,000/- incurred in the verification of claims separately in the CIRP cost which is in contravention of provisions of section 18(1)(g) of the Code read with regulation 13(1) of the CIRP Regulations and section 208(2)(a) and (e) of the Code. ?
The IBBI held that an Interim Resolution Professional (IRP)/RP is appointed by Adjudicating Authority and is duty-bound to conduct CIRP with fairness and diligence and must maintain absolute independence in discharge of his statutory duties without any external influences . ?
Further, it is duty of IP to receive and collate all claims and, code in explicit terms casts duty of verification of claims on IRP/RP. ?
Where applicant, appointed as an IRP in corporate insolvency resolution process (CIRP) of corporate debtor 'F' had outsourced his primary duty in engaging an independent professional for verification of claims and also included costs incurred in verification of claims separately in CIRP cost which was in contravention of provisions of section 18(1)(g) and section 208(2)(a) and (e) read with regulation 13(1) of CIRP Regulations, penalty equal to fee paid to independent professional was to be imposed on applicant IRP. ?
Ministry of Finance has sanctioned and notified the Scheme for the amalgamation of the Punjab and Maharashtra Co-operative Bank Limited (PMC) with Unity Small Finance Bank Limited (USFB). The scheme is effective from 25-01-2022. Provisions w.r.t. transfer of assets and liabilities and general effect; Closure of books of the transferor bank and preparation of balance sheet; Valuation of assets and determination of liabilities etc. are provided in the detailed scheme as sanctioned by MOF. ?
RBI on 24 September 2019 seized PMC Bank capped cash withdrawals and launched an investigation into its accounting delays. After Investigation RBI has come to a conclusion that the present position of PMC Bank Limited calls for the preparation of a scheme of amalgamation. The MOF approved the scheme of amalgamation on 25/01/2022. ?
USFB, a joint venture between Centrum Group and Bharatpe, has commenced operations as a small finance bank with effect from November 1, 2021. ?
The UFSB shall have the option of merging branches of PMC according to its convenience and may close down or shift the existing branches of the PMC, as per the extant instructions issued by the Reserve Bank. ?
MOF specified that the depositors whose deposits are insured under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 will be eligible under this scheme. ?
Under the scheme of the arrangement, the eligible depositors will get an amount equal to the balance in their deposit accounts or ?5,00,000 (Rupees five lakh only), whichever is less, in accordance with the Deposit Insurance and Credit Guarantee Corporation rules of distribution of such amounts.
SEBI has directed that listed companies shall issue the securities in Demat form only while processing the request for Issue of duplicate securities certificate, Claim from Unclaimed Suspense Account, Renewal / Exchange of securities certificate, Endorsement, Sub-division/Splitting/consolidation of securities certificate, Transmission & Transposition. SEBI has also put in place operational guidelines for dematerialisation of securities while processing investor's service requests. ?
The securities holder shall submit his request duly filled up Form ISR-4, as per the format attached in the regulation along with the documents or details specified therein. ?
The RTA/Issuer Companies will verify and process the service requests within 30 days of the receipt and will issue ‘Letter of Confirmation’ ?
The Letter so issued will be valid for 120 days from the date of its issuance, within which the securities holder/claimant will have to request the depository participant for dematerializing the said securities. ?
In case the securities holder/claimant fails to submit the Demat request within the aforesaid period, RTA / Issuer Companies shall credit the securities to the Suspense Escrow Demat Account of the Company.
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