Assets Restitution: A Breakthrough in Bankruptcy Resolution
The ED will restore assets attached under anti-money laundering laws to affected parties like banks and homebuyers. This follows a new SOP stemming from collaboration with the IBBI. The procedure ensures assets aid creditors, not offenders, aligning with economic and legal interests.
- Country:
- India
The Enforcement Directorate (ED) is set to return assets of bankrupt companies to stakeholders like banks and homebuyers, under a new procedure finalized to improve the insolvency process. This move, announced on Wednesday, follows extensive coordination between the ED and the Insolvency and Bankruptcy Board of India (IBBI).
As part of the initiative, Insolvency Professionals will file a 'standard undertaking' with the special PMLA court, allowing the release and rightful use of attached assets. This system, established through Sections 8(7) and 8(8) of the PMLA, intends to maximize value for creditors while ensuring offenders do not benefit.
The ED emphasizes that this mechanism exemplifies how strict PMLA enforcement can coexist with IBC objectives, enhancing prosecution effectiveness and safeguarding public interest. This coordinated effort aims to expedite court litigations and bolster recovery for creditors.
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