Insolvency and Bankruptcy Board of India- Few things to know

1. Top 5 Facts to Know about Insolvency and Bankruptcy Board Meetings

• Fact #1: At Least 4 meetings are to be done in a year and 1 meeting in a quarter.

• Fact #2: The Chairperson (or one nominated by Chairperson) heads the meeting

• Fact #3: Any 3 members are required to start the meeting

• Fact #4: The meeting will be held at time and place (generally at headquarters) mentioned in the notice

• Fact #5: If the chairperson is absent, any other member chosen shall take over the meeting

2. Composition of IBBI Board?

The Board shall consist of the following members:

1. A Chairperson

2. Three members from amongst the officers of the Central Government

3. One nominated by the RBI of India

4. Five other members to be nominated by the Central Government

Other than the ex-officio member, the appointment of the Board shall be made after the recommendation of:

1. Cabinet Secretary

2. Secretary to the Government of India

3. Chairperson of the Insolvency and Bankruptcy Board of India

4. Three experts of repute from the field of finance, law, management, insolvency, and related subjects

The term of office of the Chairperson and members (other than ex officio members) shall be 5 years or till they attain the age of 65 years, whichever earlier.

3.Recent Case Laws

IL&FS CASE: Resolution Professionals Appointed to rectify default and rescue the company.

The present situation of IL&FS is similar to “Lehman Brothers crisis” that happened way back in 2008. In the present time what has happened in IL&FS cannot be undone but the need of the hour is to find recourse for IL&FS. The biggest challenge for IL&FS as of now is to raise funds quickly to avoid any further debt defaults. The new board of IL&FS elected Arpwood capital and JM Financial Ltd. as Financial and Transaction Advisor (FTA) along with Alvarez &Marsal (A&M) as restructuring advisor. These advisors shall formulate and execute a resolution plan for debt-burdened IL&FS.

4. Popular Words You Should Know

• Quorum: 5 members ( if the Board has 8 or more members) and 3 members ( if the Board has less than 8 members) shall constitute the quorum.

• Minutes of the meeting: Minutes of all the proceedings should be maintained in books which specifies lose leaves, duly numbered etc.

• Secretary: A senior officer shall be nominated as the Secretary to keep the custody of the common seal, register of attendance, agenda, minutes book, and other records.  He shall also be responsible to arrange meetings, records minutes and to ensure all regulations are followed.

“In order to smoothly function the Board may constitute advisory and executive committees or such other committees, as required, consisting of a Chairperson and such other members specified by regulations”

– Adv. Sharlee Garg 

5. What are Advisory and Executive Committees?

The Board may consist of Advisory Committee on :

1. Service Providers

2. Corporate Insolvency and Liquidation

3. Individual Insolvency and Bankruptcy etc.

6. Composition of Advisory Committee

• Professional Members: Eminent Academicians or practitioners in the relevant area

• General Members: Eminent Citizens not having direct involvement of interest in the area.

“The Board takes the help of Advisory Committee on any related issue and shall advise and at the same time Committee also provides professional support on any related  issue as and when asked by the Board”
– Shweta Gupta, Founder, and CEO, MUDS