ED Targets IBC Fraud And Asset Stripping In Insolvency Cases
· Business · Indian Express, Hindustan Times
The Enforcement Directorate has identified the investigation of Insolvency and Bankruptcy Code frauds as a primary operational focus following its 36th Quarterly Conference of Zonal Officers in Bengaluru. The agency is prioritising cases involving disproportionately large haircuts, asset stripping, and the manipulation of the Committee of Creditors. Officials noted that some promoters are using the insolvency process to regain control of their companies, effectively circumventing Section 29A of the IBC. This regulatory scrutiny follows a recent NCLT order regarding Essel Group founder Subhash Chandra, which was later stayed by a special bench. The ED aims to address instances where companies use insolvency proceedings to avoid prosecution under the Prevention of Money Laundering Act.
Why it matters
Increased ED oversight could lead to stricter scrutiny of corporate insolvency resolutions and prevent defaulting promoters from regaining control of their assets.
Read the original report — Indian Express
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