IBBI mandates listing all homebuyers in a firm's information memorandum

IBBI has required information memoranda to include details of all homebuyers, even those who have not filed claims, and introduced reforms to strengthen valuation standards under the IBC

The Insolvency and Bankruptcy Board of India (IBBI) on Thursday mandated that information memorandum for a company undergoing insolvency proceedings include details of all allottees, even if they have not submitted a claim to the resolution professional. Allottees whose names appear in the books of the company, or in the records of the Real Estate Regulatory Authority would be eligible for such mention. This has been done to ensure fair and equitable treatment for all homebuyers.

 

In cases where these details are included in the information memorandum (IM) of the company, the resolution plan must provide for treatment of such allottees, IBBI said. “This amendment seeks to ensure fair and equitable treatment of all homebuyers, enhance transparency, and avoid uncertainty or disputes during plan implementation,” the insolvency regulator said.

   

The IBBI has said that the IM should provide details of joint development agreements and other similar collaboration, or codevelopment arrangements and details of assets under attachment by enforcement agencies, including particulars of the assets attached.

 

The Board also introduced reforms to the valuation framework under the IBC to ensure that fair value of assets would include tangible as well as intangible assets and their underlying synergies among various other changes.

 

“Recognising the critical and determinative role of valuation in the insolvency ecosystem, the IBBI has undertaken a comprehensive review of the valuation framework and has introduced structural reforms to enhance transparency, uniformity, and overall credibility of valuation practices under the Code,” the insolvency regulator said.

 

The Board has standardised the valuation reports and documentation to promote uniform disclosures, improved auditability, reduced disputes, and enhanced comparability across such reports.

 

The fair value and liquidation value, too, have to be determined according to the valuation standards notified by the Board by the registered valuer.

 

It has also brought a framework for appointing a coordinating valuer for estimating the fair value of the company undergoing insolvency. This has been done to ensure that enterprise-level consideration, including synergies and going-concern attributes, are appropriately reflected in the value of the company, the Board said. The objective is to enhance the robustness and credibility of valuation outcomes.