New Delhi: Chief of the Enforcement Directorate Rahul Navin has urged all senior officials of the agency to prioritise identifying fraud committed in the garb of insolvency proceedings under the Insolvency and Bankruptcy Code and to re-examine cases of disproportionate haircuts (downward adjustment of assets), an agency spokesperson said Tuesday.
Additionally, the ED Director urged officials at the zonal offices to identify 10 high-profile cases in each region and expedite trial proceedings at their end to secure convictions within six to eight months.
ED Director Navin made all these observations and instructions to agency officials during a three-day quarterly conference held in Bengaluru. The quarterly review conference was preceded by a management and leadership workshop in line with a Indian Institute of Management Bangalore (IIMB) programme.
“The Director, ED, identified the following core operational thrust areas for the Zones: Unearthing frauds under the Insolvency and Bankruptcy Code and the PMLA, including re-examination of collusive resolution cases involving disproportionately large haircuts through which promoters re-acquire assets,” an agency spokesperson said in a statement Tuesday.
The development comes at a time the agency has launched a crackdown on collusive and compromised insolvency processes in recent months. The agency has also flagged several gaps in the insolvency process, which have been brought to the attention of the Insolvency and Bankruptcy Board of India (IBBI) for further upgradation.
The issue of disproportionate haircuts in insolvency proceedings came into the spotlight a few weeks back when Essel Group chairman and former Rajya Sabha MP Subhash Chandra was granted a repayment plan by the National Company Law Tribunal (NCLT) of Rs 6.5 crore in personal insolvency proceedings, against admitted claims of Rs 22,006.57 crore. However, a newly constituted five-member bench of the NCLT barred Chandra from alienating any of his assets or property during the proceedings pending before it.
Additionally, the ED chief also batted for closer coordination with state police and other law enforcement agencies along with mandatory valuation of all confirmed attached properties by government-approved valuers, with geo-tagging, within six months.
Apart from setting the agency’s agenda for the next few months, the ED chief also cautioned officers about the use of Artificial Intelligence when dealing with materials in criminal cases.
“On technology, he cautioned that even offline deployments of Artificial Intelligence carry risks of data leakage and that confidential case material must be handled with the utmost care, while underlining the shift in intelligence culture from a ‘need to know’ basis to a ‘duty to share’ among law enforcement agencies,” an agency spokesman quoted him as saying in his address to officers during the internal conference.
(Edited by Viny Mishra)
Also read: Why Subhash Chandra ‘fraud’ case exposes limits of India’s Insolvency and Bankruptcy Code