Insolvency regulator IBBI has slapped a penalty on Vijay Kumar Garg, an insolvency professional, for contravention of the Insolvency and Bankruptcy Code (IBC) during his performance of the role of Interim Resolution Professional and/or Resolution Professional in the Corporate Insolvency Resolution Process of Gitanjali Gems Limited (GGL), Nakshatra World Limited (NWL) and Nakshatra Brands Limited (NBL).

Garg, who is a professional member of the ICSI Institute of Insolvency Professionals, has been directed to fork out a penalty of 25 per cent of fees payable to him. He will also need to undergo pre-registration educational course from the Insolvency Professional Agency (IPA) of which he is a member and pass the Limited Insolvency Examination again to build his capacity to take up the assignments on his own, the IBBI has said.

IBBI's Disciplinary Committee has in its order held that Garg's move to engage Duff & Phelps to provide support services during CIRP of GGL, NWL and NBL was "illegal" and that Duff & Phelps cannot be considered a "professional".

The Disciplinary Committee slammed Garg for converting the noble insolvency profession into a business, for converting professional-client relationship to that of money lending and borrowing, having manipulated the market for insolvency professional services and for having attempted to siphon off crores of rupees from the ailing Corporate Debtor (GGL) to its partner in crime and acted under the influence of one creditor besides contravening every provision of IBC for ulterior purposes.

Garg has also been directed to ensure that no amount beyond the reasonable fee, as determined by the IBBI Expert Committee, be paid to Duff & Phelps. If any amount beyond this has been paid, Garg has been asked to make good the amount to the Corporate Debtor (GGL) within 45 days of the order, the Disciplinary Committee has said.

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