Corporate insolvency: Forensic audit needed on promoters bidding for stressed assets

Our Bureau New Delhi | Updated on January 09, 2018

Forensic audits should be mandated on promoters bidding for stressed assets under an insolvency process, several legal experts have said.

Only genuine promoters should be allowed to proceed for insolvency proceedings or bidding for Stressed Assets, they said.

"The conducting of the forensic audit of the Corporate debtor is essential to rule out the possibility of any fraud perpetuated by the promoters", said Neeraj Aarora, an independent director of the IPA of Institute of Cost Accountants of India and Advocate, Supreme Court of India.

He was addressing a seminar on " Challenges and Emerging Avenues under Insolvency and Bankruptcy Act 2016", organised by NW study circle of Insolvency Professionals here.

Speaking on the occasion, Mukulita Vijaywargiya, Whole Time Member, Insolvency and Bankruptcy Board of India said that the Insolvency law has been amended mandating stringent scrutiny to check antecedents of the bidders, including their credit worthiness along with the resolution plan submitted by resolution professional.

She also said that insolvency and Bankruptcy code is the most dynamic law in the country which is being amended expeditiously to meet the interest of stakeholders and objective underlying the law.

Sunil Pant, CEO, Indian Institute of Insolvency Professionals of ICAI said that the hostile attitude of the promoters is biggest obstacle causing delay in the proceedings.

There is a need to start foundational course to train the Insolvency Professionals for handling such issues, he added.

Published on November 12, 2017

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