In­sol­vency Pro­ceed­ing: A Bur­den for Some, An Op­por­tu­nity for Oth­ers

Many or­di­nary grads, with ex­pe­ri­ence in fin do­main, re­quired to as­sist in­sol­vency pros

The Economic Times - - Finance & Commodities - Saikat.Das1@ times­group.com

Mumbai: In­dia’s .₹ 7 lakh-crore debt re­cov­ery isn’t an ex­clu­sive op­por­tu­nity for IIT-IIM alumni or top CAs to bur­nish their CVs: Thou­sands of or­di­nary grad­u­ates, with ex­pe­ri­ence in the fi­nan­cial do­main, may be part of the un­prece­dented ex­er­cise that re­quires a huge num­ber of sup­port staff to as­sist the de­ci­sion­mak­ers.

The gov­ern­ment is plan­ning to de­sign a cer­ti­fied train­ing pro­gramme for such peo­ple. In as­so­ci­a­tion with the In­sol­vency and Bank­ruptcy Board of In­dia, pro­fes­sional in­sti­tutes, and top ac­coun­tants and com­pany sec­re­taries, the gov­ern­ment ex­pects to kick-start the process, for which course mod­ules may soon be de-

signed. “The Code em­pow­ers them (in­sol­vency pro­fes­sion­als) in sev­eral ways to dis­charge their re­spon­si­bil­i­ties ef­fec­tively,” said MS Sa­hoo, chair­per­son at the In­sol­vency and Bank­ruptcy Board of In­dia (IBBI).

“It would help them fur­ther if they can have ac­cess to a pool of skilled per­son­nel to as­sist them in their work.” Char­tered and cost ac­coun­tants, com­pany sec­re­taries and lawyers with 10 years of ex­pe­ri­ence are el­i­gi­ble to ap­pear for IBBI ex­ams to qual­ify as in­sol­vency pro­fes­sion­als (IPs). Grad­u­ates, too, can take the same ex­am­i­na­tion, but with at least 15 years’ ex­pe­ri­ence. “Even with 15 years of ex­pe­ri­ence, grad­u­ates would not be on a par with other qual­i­fied pro­fes­sion­als such as the CAs, CWAs or the CS,” said ICAI for­mer pres­i­dent Manas Kumar Thakur, whose term ended last week. “They need groom­ing and train­ing to be­come fa­mil­iar with the terms and pro­vi­sions of the in­dus­try…Cer­ti­fied train­ing pro­grammes, if im­ple­mented in right earnest, will cre­ate thou­sands of jobs op­por­tu­ni­ties.”

For now, the cat­e­gory of top pro­fes­sion­als looks to be in high de- mand as grad­u­ates are not con­sid­ered ca­pa­ble enough of run­ning com­pa­nies on a day-to-day ba­sis. IBBI is al­ready run­ning short ori­en­ta­tion/train­ing pro­grammes for the ex­ist­ing pool of IPs. An IP is sup­posed to run the day-to-day busi­ness of a de­fault­ing com­pany for up to 270 days once the bor­rower is ad­mit­ted for in­sol­vency pro­ceed­ings.

“Para in­sol­vency sup­port ser­vices should be de­vel­oped to aid the whole gamut of ac­tiv­i­ties now,” said Mamta Bi­nani, a res­o­lu­tion pro­fes­sional and past pres­i­dent of the In­sti­tute of Com­pany Sec­re­taries of In­dia. “Such a move will help ad­dress the day-to­day tight-rope work re­quired in the in­sol­vency prac­tice. With stip­u­lated ex­pe­ri­ence, such grad­u­ates should be fu­ture-ready to act as a sup­port sys­tem for sea­soned in­sol­vency pro­fes­sion­als.”

There are around about 600-700 qual­i­fied in­sol­vency pro­fes­sion­als in the coun­try, ac­cord­ing to Bi­nani. Each needs a team of 10-15 peo­ple on an av­er­age. The team is es­sen­tial for any IP as it in­cludes in­dus­try ex­perts, lawyers and other pro­fes­sion­als.

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