IBBI Tightens Insolvency Disclosure Norms in Fifth Amendment Regulations, 2025
IBBI's Fifth Amendment Enhances CIRP Transparency with Mandatory Disclosure of Avoidance Transactions and New Restrictions on Resolution Plan Assignments
The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2025, bringing significant changes aimed at enhancing transparency and accountability in the corporate insolvency resolution process (CIRP).
The amendment mandates stricter disclosure of "avoidance transactions" and bars their post-facto inclusion in resolution plans unless previously disclosed. These changes amend the original 2016 regulations under the Insolvency and Bankruptcy Code (IBC), 2016.
Mandatory Disclosure of Avoidance Transactions:
Regulation 36(1) now includes the clause “and its subsequent updates thereof,” emphasizing continuous updates to the information memorandum after the insolvency commencement date.
A new clause (ha) under Regulation 36(2) requires disclosure of all identified avoidance transactions (such as preferential, undervalued, extortionate, or fraudulent transactions) and related filings before the Adjudicating Authority.
Restrictions on Assignments in Resolution Plans:
Regulation 38 has been amended to insert sub-regulation (2A), which prohibits the assignment of avoidance transactions or fraudulent/wrongful trading in resolution plans if:
(a) they were not disclosed in the information memorandum, and
(b) not communicated to prospective resolution applicants before the final submission deadline.
However, this restriction does not apply to resolution plans already submitted to the Adjudicating Authority before the commencement of the Fifth Amendment Regulations.
Notification Details
Notification No. : F. No. IBBI/2025-26/GN/REG128
Date: 04/07/2025
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
