The Government is planning to establish a regulator for the growing tribe of insolvency professionals, who specialise in rehabilitation or winding up of sick companies. The Companies Bill, 2009 has given formal recognition to insolvency experts as professionals for the first time. It was felt that there should be a regulator for insolvency professionals, they added.Online GST Certification Course by TaxGuru & MSME- Click here to Join
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To cater to the demand, the Institute of Company Secretaries of India (ICSI) would soon start a course for its members on corporate insolvency and restructuring. In this regard, ICSI has tied up with the INSOL International, the London-based global coalition of national associations for lawyers and accountants specialising in insolvency, Mr N.K. Jain, Secretary and CEO, ICSI, said. Currently, there is a Government-recognis ed nodal body called Insolvency Practitioners Association (IPA) comprising lawyers, company secretaries, chartered accountants and cost and works accountants. Once the Bill becomes an Act, IPA will start its training and awareness programmes. “IPA will help raise the standards of insolvency professionals in India to international levels. Nowadays insolvency matters have become cross-border issues. We need insolvency professionals who can match up to the global best,” Mr Amarjit Singh Chandhiok, President, IPA, said. Thanks to the global financial crisis and economic slowdown, there is an increase in insolvency-related work, said Ms Maneesha Dhir, Secretary, INSOL India, affiliated to INSOL International. “Due to the increasing opportunities, more professionals have begun to specialise in insolvency,” she said.
Currently, only official liquidators help in insolvency proceedings. But the Companies Bill has proposed that a Tribunal can appoint a Company Liquidator from a Government-maintain ed panel comprising CAs, lawyers, CS, as well as CWAs with at least 10 years experience. “This will also ensure that more professionals specialise in insolvency,” Ms Dhir said. The Bill proposes that insolvency cases would be heard by the National Company Law Tribunal and the setting up of a Rehabilitation and Insolvency Fund. According to International Financial Corporation’ s `Doing Business 2010′ report, which ranked 183 countries on different parameters of ease of doing business during June 2008-May 2009, India was among the slowest in facilitating the closure of business. It takes as many as seven years on an average to close a business in India, compared with Ireland’s 0.4 years or Japan’s 0.6 years. However, thanks to some reforms such as streamlining procedures and increasing the judges dealing with insolvency cases, India’s rank in closing down a business jumped four places to 138.