The Insolvency and Bankruptcy Board of India, vide its notification dated 5 October 2018 amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 by notifying the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2018.
The key changes brought through this amendment are as follows:
- Omitted the meaning of dissenting financial creditors as given in Regulation 2 (1) (f) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
- Removal of the requirement under Regulation 21(3) (b), for the notice of the meeting of committee of creditors to state that the vote of the members of committee should not be taken unless all the members are present at such meeting.
Amendments in the voting process of the committee of creditors
- Amendment of Regulation 25 (5) has been brought to provide for the detailed voting procedure by electronic means in case a member is not present for a meeting. The amended regulations now also provide for the circulation of minutes to the authorized representatives in addition to the creditors. The authorized representative is obligated to circulate the minutes of meetings received by it, to the creditors in a class and announce the voting window at least twenty-four hours before the window opens for voting instructions and keep the voting window open for at least twelve hours.
- Addition of sub-regulation 1A to Regulation 26 which provides that the authorized representative shall exercise the votes either by electronic means or through electronic voting systems as per voting instructions received by him from the creditors in the class.
- Substitution of sub-regulation (1) of Regulation 38 which now provides that the mandatory content of the resolution plan shall provide that the amount due to operational creditors under a resolution plan must be given priority in payment over financial creditors. Earlier the provision provided for specifying the insolvency resolution process costs providing that the insolvency resolution process costs will be paid in priority to any other creditors;
- Omission of Regulation 39 (1) (b), the requirement of providing an undertaking by the prospective resolution applicant that he shall provide additional funds to the extent required is no longer required.
- Omission of sub-regulation (3A) of Regulation 39, the committee is no longer required to specify the amounts payable from resources in the contents of the resolution plan, while approving the same.
- Addition of regulation 39A, which provides for preservation of records. It states that the Interim Resolution Professional or the Resolution Professional shall preserve physical and electronic copy of the records relating to corporate insolvency process of the corporate debtor as per the record retention schedule that the Insolvency and Bankruptcy Board may communicate in consultation with the Insolvency Professional Agencies.