Resolution pro suspended over 'related-party deals'

The Insolvency and Bankruptcy Board of India (IBBI) on Monday suspended the registration of Savan Godiawala as a resolution professional for three years for alleged related party transactions.

Godiawala, resolution professional (RP) for Lanco Infratech Ltd, allegedly made a "wrongful withdrawal" of fees and hired related parties without proper identification of the scope of work, the order said.

Godiawala, who was appointed as liquidator for Lanco Infratech after it was admitted for liquidation, is a partner of Deloitte Touche Tohmatsu India LLP (DTTILLP) and had appointed the firm to assist him in taking control and managing the affairs of the company and other obligations as its liquidator. He was also appointed as resolution professional for Shirpur Power Pvt Ltd.


The disciplinary committee under the Insolvency and Bankruptcy Code (IBC), had in its order of August 18 observed that Godiawala engaged a related entity to help him with liquidation proceedings.

In the case of Shirpur Power, the committee observed that although Godiawala appointed BDO India LLP vide engagement letter dated July 1, 2020, to conduct the transaction review audit, he failed to initiate action as required under the regulatory framework.

"The DC (disciplinary committee) notes that no document is available to detail the objective criteria adopted in the process of the selection of DTTILLP. The minutes of the CoC dated September 12, 2017, indicate that while getting the approval of the CoC for engaging DTTILLP for rendering support services during the CIRP process, selection criteria for identifying DTTILLP to provide professional support were not disclosed," the committee said in its 18-page order.

Beginning this year, IBBI has come down hard on several resolution professionals, even banning a few who were involved in irregularities.