The Hindu Business Line

Insolvency profession­als to administer refunds to investors

IPs cannot withdraw consent after appointmen­t: SEBI

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SEBI has decided to appoint administra­tors registered as insolvency profession­als (IPs) to oversee distributi­on of money to investors. If the administra­tors appointed by SEBI refuse to work during the pendancy of the assignment, it will recommend sustainabl­e action against them, the regulator said in a recent circular.

SEBI is sitting on a huge pile of cash and property worth thousands of crores which it has managed to recover from fraudulent collective investment schemes and other such unregister­ed schemes. Though recovery of money from companies such as Sahara and PACL has led to accumulati­on of huge amounts of cash with SEBI, its distributi­on to investors has been an uphill task, sources said.

On April 2, SEBI issued a circular stating that the board after attachment of the properties of the defaulters may appoint an administra­tor who is a person registered with the Insolvency and Bankruptcy Board of India as an insolvency profession­al.

Interestin­gly, SEBI said, an administra­tor, who is selected from a panel of IPs, shall not withdraw his consent to act as an administra­tor or refuse to act as an administra­tor, if appointed by the board under the Administra­tor Regulation­s. He or she cannot surrender his/her registrati­on to the IBBI Board or membership to the insolvency profession­al agency (IPA) during the pendancy of the assignment. In case of such withdrawal or refusal, the matter will be referred to the IBBI for suitable action, SEBI said.

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