The insolvency regulator IBBI’s Disciplinary Committee has barred Rita Gupta, an insolvency professional, from seeking or accepting any assignment or render any services for one year.

This disciplinary action comes after IBBI concluded that Gupta, who is a professional member of the Indian Institute of Insolvency Professionals of ICAI, had contravened insolvency law by withdrawing money from the corporate debtor (Shilpi Cable Technologies) without the approval of the Committee of Creditors (CoC). 

The IBBI order, issued on March 14, will come into force on expiry of 30 days i.e. April 14.

IBBI was of the prima facie view that Gupta’s conduct of withdrawing money (fees) from the Corporate Debtor (CD) without the approval of the CoC is in contravention of the regulation 34 of the CIRP Regulations and clause 26 of the Code of Conduct of IP Regulations.

The contention of Rita Gupta, about fee withdrawal is that the CoC delayed approval of IRP/ RP fees and that the CoC fixed higher fees for another RP, is not tenable as is being inconsistent with the provisions of the Corporate Insolvency Resolution Process (CIRP) Regulations, the insolvency regulator said.

However, despite the one year ban, Gupta can continue to conduct and complete the assignments/processes she has in hand as on date, the Disciplinary Committee ruled.

Gupta, who was initially appointed as Interim Resolution Professional (IRP) of Shilpi Cable, was later confirmed as resolution professional (RP) by the CoC in the first meeting held on February 15, 2018.

The contravention of Gupta was that she withdrew a sum (towards fees) from the corporate debtor far in excess of the fees approved by the CoC. The IBBI’s disciplinary committee has highlighted that Code is clear that the fees of an IRP/RP is to be fixed by the CoC and only the amount fixed by it can be withdrawn.