The IBBI has suspended an insolvency professional for three years due to failures in constituting a Committee of Creditors and securing assets, which amounts to professional misconduct.
IBBI's Suspension of Insolvency Professional for Misconduct
The Insolvency and Bankruptcy Board of India (IBBI) has announced a three-year suspension for an insolvency professional found guilty of professional misconduct. The misconduct included failure to constitute a Committee of Creditors (CoC) and ensure the security of corporate debtor assets, which severely hampered the Corporate Insolvency Resolution Process (CIRP).
This action is aligned with IBBI's mandate to uphold high standards of diligence among insolvency practitioners and ensure the integrity of insolvency proceedings. The findings indicate a breach of essential procedural obligations that directly impact the resolution process.
Legal professionals involved in insolvency matters should take this suspension as a crucial lesson on the importance of adhering to established protocols during the CIRP, thereby safeguarding the interests of all stakeholders involved.
Citations
- IBBI Notification (2026) No. 34
