corporate law

Penalty for Insolvency Professional Mr. Goel Due to Regulatory Violations

Penalty Imposed on Insolvency Professional Mr. Goel for Regulatory Violations

The Disciplinary Committee (DC) of the Insolvency and Bankruptcy Board of India (IBBI) has determined that Mr. Sandeep Goel, an Insolvency Professional, exhibited negligence in his management of insolvency proceedings involving several corporate entities. The committee has pinpointed specific regulatory violations related to Mr. Goel's failure to adequately inform the Adjudicating Authority (AA) and his involvement with a related party.

Allegations and Findings

  1. Failure to Update List of Creditors

    • Mr. Goel did not submit an updated list of creditors for Him Cylinders Limited (Corporate Debtor-1) to the AA for nearly six months, which constituted a significant lapse in duty. Although Mr. Goel claimed that the delay was due to his advocate's negligence, the DC emphasized that compliance with regulations is the sole responsibility of the Insolvency Professional (IP).

  2. Engagement of Related Party

    • Prior to its recognition as an Insolvency Professional Entity (IPE), Mr. Goel engaged Stalwart Resolution Professional LLP without the necessary disclosures, violating Regulation 23B of the IBBI (Insolvency Professionals) Regulations and Circular No. IP/005/2018 dated 16.01.2018.

Regulatory Background

The findings of the DC were substantiated by the Insolvency and Bankruptcy Code and relevant regulations, particularly:

  • Regulation 13(2)(d) of the CIRP Regulations mandates that an IP must submit an updated list of creditors to the AA at the commencement of the resolution process.
  • Regulation 23B of the IP Regulations prohibits engagement with relatives or related parties concerning assignments unless timely disclosures are made.

Penalty Imposed

According to Section 220 of the Code, the DC has taken the following actions:

  • A penalty of ₹5,00,000 (Rupees Five Lakh only) was imposed on Mr. Goel.
  • A caution was issued, urging Mr. Goel to exercise increased diligence in fulfilling his responsibilities under the Code.