Meeting of committee of creditors under IBC, 2016

    Posted By : Ekta / Published on : 08-Feb-2019 04:58 AM / View : 123 / Comment : 1
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    Dear Members,

    Can a member attend the meeting of the committee of creditors by
    video conferencing?
    Read more on : under creditors committee meeting

    • As per Regulation 21(1) read with Regulation 23(1) of the CIRP, the notice of the meeting “shall inform” of the option available to the members to participate through video conferencing or other audio and visual means.

      Also, as said above, in case any member of the CoC is not present at the meeting, votes with respect to such meetings have to be sought via e-voting.

      In its intent to make use of technology, it seems that the provisions of the law have missed on the practical difficulty and cost burden on the corporate debtor (which is anyway financial unhealthy). E-voting is surely a costly and time consuming affair as one needs to develop model with respect to assigning voting percentage to each of the member of the CoC. This should be noted that for general meetings of members in corporate – the voting rights are aligned to the shareholding and the same is always updated on real time basis with the RTA. Therefore no extra calculation / programming needs to be done for conducting a voting by electronic means. However, since in IBC, the votes are aligned with the individual claim amount vs the total claim amount of all the financial creditors put together – the same has to be set in the system of the service providers to enable e-voting.

      Also, as a matter of fact, unlike in case of corporate e-voting, in IBC e-voting is after the meeting. In corporate e-voting, the voting happens before the meeting.

      The concept of e-voting is to allow such members to vote who are unable to attend the meeting in person. Accordingly, where all the members of the CoC are present at the meeting and ready to vote at the meeting, the requirement of providing video conferencing facility and voting by electronic means may be done away with.

      However, where some members are not present, or where members want to take time (for example, consultations at their respective offices / heads), members may vote electronically.


      Nitu Poddar

      08-02-2019 / 05:01:31 AM

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