The Insolvency and Bankruptcy Board of India (IBBI) recently granted registration to ‘ICSI Insolvency Professionals Agency’ to act as Insolvency Professional Agency (IPA) under the IBBI (Insolvency Professional Agencies) regulations, 2016. The Institute of Company Secretaries of India (ICSI) is looking at adding 500 Insolvency Professionals in their gamut and getting the work started. The Institute of Company Secretaries of India (ICSI) and IBBI organised a national seminar in Mumbai as part of their effort to get the ball rolling and create awareness about the Insolvency & Bankruptcy Code. ICSI’s president C S Mamta Binani talks about the Code and way ahead.
•How do you plan to create awareness about ‘Insolvency & Bankruptcy Code, 2016’?
We are planning to have 100 seminars until March 2017 across the country.
•Usually, it’s the banks that are in the receiving end of bad loans. How do you plan to get them on board for this?
Yes, we are planning to get in touch with Bankers Association. We want them to help us take this forward. Our efforts are same which is why we are very keen to work with them.
Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act has come as a boom for banks. With the help of the act, they have been unlocking some of the assets but Sarfaesi requires lot of efforts as getting the asset liquated is not an easy task. The end should not be about getting the assets liquidated but should be about the organisation that is not able to function. If the creditors feel that after expiration of the credit term they cannot pay, then they can help the company with resolution mechanism. The creditors and debtors can come out with a plan. Here we are talking about revival and not killing the organisation.
In our country, creditors’ are hugely depending on banking system. So, we look at adding them.
•What are the challenges the Code will face during its teething years?
Honestly, one of the biggest challenges that I am looking at is the transfer of management of the company. For instance, if a corporate debtor does not cooperate because he or she is the owner of the company and now, they have to transfer the management to someone else, I feel cooperation issue might arise.
Secondly, 75 per cent of creditors have to say yes to the scheme and bringing them under one platform would be a task. There are lot of complications when a person goes bust.
Third, the Insolvency Professionals have to take onus of everything including certification. If anything happens later date, the Insolvency Professional will be held responsible.
•Is it a task to attract Insolvency Professionals in short-term?
Anybody and everybody will not be interested in becoming Insolvency Professionals. In India, still people are working in individual mode. People are not into big firms, and then they do not have the bandwidth which is required to do such work. That could be an issue. This code could start a great movement where people would lead and bring in the pool of talents and partnerships. This may force people to look at the wider gamut. Unless there is no market force, some things do not happen.
•How many professionals would you require to deal insolvency cases?
That is a number that we do not have. But we need a quite a bit of professionals, as there is 1000-odd cases. It is just a matter of some- time but all will not come simultaneous. After the first exam on December 31, 2016, people will get
comfortable to give exams and then they will come forward.
•What is the interval of these exams?
We think it should not be more than two months. The Insolvency Board also stated that the exam should take place frequently.
•At present, GST is stalled at the parliament. But what are your expectations around it?
Today, if you see GST has been stalled because of other issues in the parliament. But lot of these private bodies are working on the software. The government is maintaining that it will be rolled out in April 1, 2017. But everyone in the professional circle is aware that it looks very difficult. But all the eyes are on this game-changer.
•Why did you decide to have an overseas branch?
We have been contemplating for a while to open an overseas branch in Dubai, because we have lot of company secretaries there. Association support will help us to grow in those areas. We are talking about the whole Gulf area as the government there is also talking about taxation process for the company. With regulations coming in place, there should be someone to handle such complex situations and our role is very important in this context.
•Will ICSI expand further?
We are not looking at abroad right now. We are evaluating America and UK as a destination, as we do not want to venture into anything new without testing the waters. But we are looking at good places to open our chapters in the country. We are opening a centre of excellence in Kolkata in a very big way. It will include research in governance issue and where our economy. This would help us become quality professionals.
