IBBI Update - Strengthening due diligence under Section 29A- reg

The Insolvency and Bankruptcy Board of India has directed Resolution Professionals (RPs) to strengthen due diligence pertaining to Section 29A of the Insolvency and Bankruptcy Code, 2016, which governs the eligibility of resolution applicants. RPs, under various provisions of the Code and the CIRP Regulations, are required to inform PRAs of the ineligibility criteria in Form G, obtain undertakings and affidavits confirming eligibility, and conduct due diligence to verify compliance.

Considering the importance of Section 29A in safeguarding the credibility of the CIRP and preventing post-resolution litigation, RPs must now place a detailed note on Section 29A compliance before the Committee of Creditors (CoC) at the time of evaluating resolution plans . They must also ensure that the CoC’s discussions and observations in this regard are properly documented in the minutes . The directive has been issued under the authority of Section 196 of the Code. Link - View Circular