SEBI to appoint Insolvency Professionals for sale of assets to recover investor money
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SEBI revised the procedures to be followed for refunding investors’ money pursuant to failures on the part of companies to comply with the disgorgement or refund orders passed by it.
“In case an entity is not traceable or is not complying with SEBI directions, the recovery officer can appoint an administrator for the purpose of selling the properties attached,” the regulator said.
Only an entity registered with the IBBI as insolvency resolution professional may be considered eligible for appointment as administrator. The Insolvency and Bankruptcy Board of India is implementing the Insolvency and Bankruptcy Code.
“Under the norms, no person will be appointed as an administrator where such an appointment may be objected to on the grounds that give rise to justifiable doubts as to the independence or impartiality of such a person. Any question involving issues of conflict of interest in the appointment of an administrator will be decided by the recovery officer. The administrator shall provide an undertaking to the board of the absence of any conflict of interest with the defaulter, its directors, promoters, key managerial personnel and its group entities,” SEBI said.
The expenses pertaining to the administrator would be borne by the defaulter or come from the sale proceeds of the entity’s assets.
The rules has become operative from October 3.#casansaar (Source - The Hindu Business)
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