IBBI imposes fine on company secretary for misconduct and delay in filing CIRP 7
He behaved in contravention of the rules and regulations
IBBI imposes fine on company secretary for misconduct and delay in filing CIRP 7
He behaved in contravention of the rules and regulations
The disciplinary committee of the Insolvency and Bankruptcy Board of India (IBBI) has imposed a fine of Rs.2 lakh on the company secretary Anuj Kumar Tiwari for the alleged non-cooperation with the Inspecting Authority (IA) and delay in filing the Corporate Insolvency Resolution Process (CIRP) Form 7.
Regulation 40B (1A) provides that when the activity was not complete within the specified date, the Insolvency Resolution Professional (IRP) or the Resolution Professional (RP) would file CIRP 7 within three days and continue to file it every 30 days until the activity was complete.
Comprising the Whole-Time Member Jayanti Prasad, the board observed, "No monthly filing of CIRP 7 was done by Tiwari as required by the provisions."
Therefore, it meant a contravention of the CIRP Regulations read with Clause 13 of the Code of Conduct (CoC). As per Regulation 4(4) of the Inspection Regulations, it is the duty of the service provider/associated person to produce before the IA such records and furnish statements and information relating to its activities until required. The duty also included providing all assistance to the IA in connection with the inspection.
However, Tiwari submitted that the inadvertent delay on his part was due to personal reasons, which he reported to the board.
The board observed that the CoC members had become hostile when updated about CIRP and the expected costs and the non-cooperation from the creditors followed. It held that the reasons provided could not justify non-cooperation with the IA by Tiwari.
Thus, the disciplinary committee imposed a penalty of Rs.2 lakh on Tiwari. The IP cautioned him that while performing his duties, he should be more careful in the future. Tiwari was directed to strictly comply with the applicable provisions of the code and its underlying regulations.