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Disputes

Resolution professionals on warpath with insolvency regulator IBBI over ad valorem fee on earnings

The IBBI has introduced an ad valorem fee linked to earnings of resolution professionals (RPs). Many RPs see it as discriminatory. They feel, while 0.25% looks nominal, it’s still a fee and charged without any service or support from the regulator. IBBI believes it has transparently followed all procedures. The matter is now before the Madras High Court.
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15 Jul 2020 14 Mins Read 0 comment
M S Sahoo, chairperson of the Insolvency and Bankruptcy Board of India (IBBI) Getty Images
M S Sahoo, chairperson of the Insolvency and Bankruptcy Board of India (IBBI)
The insolvency regulator could itself land in a bit of a financial quagmire if a fight brewing with the constituency it regulates — resolution professionals or RPs — doesn’t go its way. At the centre of this dispute is a 0.25% fee the Insolvency and Bankruptcy Board of India (IBBI) has begun charging the RPs annually from the last
email response: “The IBBI has a standing arrangement that enables the stakeholders to suggest modifications in regulations, throughout the year. It is an endeavour of the IBBI to modify regulations to meet the evolving needs of the market and stakeholders.” Would the Madras High Court find that argument good enough? Watch this space. ( Graphics by Mohammad Arshad)
The insolvency regulator could itself land in a bit of a financial quagmire if a fight brewing with the constituency it regulates — resolution professionals or RPs — doesn’t go its way. At the centre of this dispute is a 0.25% fee the Insolvency and Bankruptcy Board of India (IBBI) has begun charging the RPs annually from the last email response: “The IBBI has a standing arrangement that enables the stakeholders to suggest modifications in regulations, throughout the year. It is an endeavour of the IBBI to modify regulations to meet the evolving needs of the market and stakeholders.” Would the Madras High Court find that argument good enough? Watch this space. ( Graphics by Mohammad Arshad)

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