Insolvency Professional cleared of misconduct for late AFA application

The Disciplinary Committee found that Insolvency Professional Mr. Rajesh Samson did not commit Professional Misconduct for accepting an assignment without a valid Authorization for Assignment (AFA) after a specified date. Despite submitting the AFA application late, his earlier consent to act as the Interim Resolution Professional (IRP) was considered valid. The Disciplinary Committee emphasized the importance of compliance with regulations but ultimately closed the case without further action, as Mr. Samson's actions were deemed acceptable based on the circumstances.

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Issues:
Violation of regulations by Insolvency Professional Mr. Rajesh Samson for accepting an assignment without a valid Authorization for Assignment (AFA) after a specified date.

Analysis:
The Insolvency and Bankruptcy Board of India (IBBI) issued a Show Cause Notice (SCN) to Mr. Rajesh Samson for contravening sections of the Insolvency and Bankruptcy Code, 2016 and related regulations by accepting an assignment without a valid AFA after a specific date. Mr. Samson responded to the SCN, and the matter was referred to the Disciplinary Committee (DC) for review. The DC considered the relevant provisions of the Code, rules, and regulations before making its findings.

Mr. Samson's submissions included details of his consent to act as the Interim Resolution Professional (IRP) before the specified date and the subsequent application for the Corporate Insolvency Resolution Process (CIRP). The DC noted that Regulation 7A of the IP regulations mandates Insolvency Professionals (IPs) to hold a valid AFA before undertaking any assignment after a particular date. It was highlighted that the AFA application by Mr. Samson was submitted after the specified date, but his appointment as IRP was confirmed based on his earlier consent.

The DC emphasized that IPs must comply with the Code of Conduct, regulations, and guidelines specified by the Insolvency Professional Agency. It was noted that Mr. Samson's registration was subject to these conditions, including the requirement to follow the Code of Conduct listed in the regulations. The DC found that Mr. Samson's actions did not amount to Professional Misconduct based on the earlier consent provided and subsequent confirmation of his appointment by the relevant authorities.

In light of the Disciplinary Committee's previous order on the matter and the absence of any direction required, the DC disposed of the SCN without further action. The order was forwarded to the relevant authorities for information, and the show cause notice was officially closed.

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