Due diligence by Insolvency Professionals regarding misuse of IBC framework

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....nsolvency Professional Entities All Insolvency Professional Agencies (By way of circulation on the website of IBBI) Subject: Due diligence by Insolvency Professionals regarding misuse of IBC framework 1. The Insolvency and Bankruptcy Board of India (IBBI / Board) has received information from law enforcement and regulatory agencies that, in certain cases, the framework under the Insolv....

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....icators: (a) CIRP initiated by, or debt assigned shortly before initiation to, a single creditor (other than a scheduled bank or a public financial institution as defined in section 2(72) of the Companies Act, 2013), who then dominates the CoC; (b) a cluster of CDs with common promoters, addresses, directors, or inter-lending, taken into CIRP within a proximate timeframe with ove....

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....ary course of commercial operations. They are intended to flag circumstances that warrant closer examination, and no indicator, by itself, should be treated as conclusive of misuse of the insolvency process. 4. On noticing one or more such indicators, or other circumstances of a similar nature, the IP should undertake such further enquiry as may be warranted, based on the records and informatio....