In a significant move, the Enforcement Directorate (ED) has facilitated the release of assets attached under the Prevention of Money Laundering Act (PMLA) to support the resolution of companies under the Insolvency and Bankruptcy Code (IBC).
File image (Photo: IANS)
In a significant move, the Enforcement Directorate (ED) has facilitated the release of assets attached under the Prevention of Money Laundering Act (PMLA) to support the resolution of companies under the Insolvency and Bankruptcy Code (IBC). This step is aimed at maximising recovery for creditors, including banks and homebuyers.
The Insolvency and Bankruptcy Board of India (IBBI) issued a circular in this context on November 4, following “multiple rounds” of coordination meetings between its officials and the investigators of the Enforcement Directorate (ED).
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As a result of this coordinated approach, according to the agency statement, a “standard undertaking” will be filed by Insolvency Professionals (IPs) before the special PMLA court to release the assets from ED’s attachment and offer them for restitution or restoration to the creditors.
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Previously, PMLA attachments could hinder the IBC process. After coordination with the Insolvency and Bankruptcy Board of India (IBBI), a standard mechanism has been established. This allows resolution professionals to seek the release of attached assets for the benefit of creditors, ensuring no advantage flows back to the accused.
The initiative demonstrates that PMLA enforcement and IBC resolution can work in tandem to prosecute offenders while protecting creditor interests.
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