IBBI amends voluntary liquidation process regulations

A liquidator will have to deposit unclaimed dividends and undistributed proceeds in a separate account before seeking dissolution of a corporate debtor under the voluntary liquidation process, according to the IBBI. The Insolvency and Bankruptcy Board of India (IBBI) has notified changes to the voluntary liquidation process regulations.

With the amendments, a liquidator has to deposit unclaimed dividends and undistributed proceeds in a liquidation process along with any income earned thereon into the Corporate Voluntary Liquidation Account before submission of an application for dissolution of the corporate person, a release said on Thursday. The amendments also provide a process for a stakeholder to seek withdrawal from the Corporate Voluntary Liquidation Account.

The IBBI would operate and maintain the account in the Public Accounts of India. "A liquidator, who fails to deposit any amount into the Corporate Voluntary Liquidation Account under this regulation, shall deposit the same along with interest thereon at the rate of twelve per cent per annum from the due date of deposit till the date of deposit," as per the regulations.

Amount deposited with the account that remains unclaimed or undistributed for 15 years from the date of dissolution of the corporate person would be transferred to the Consolidated Fund of India.