IP Santanu T Ray

  June 24, 2021

(Mr. Ray is an Insolvency Professional based in Mumbai.)

Can you tell us a little about yourself and your academic and professional background?

My Name is Santanu T Ray. I am an Insolvency Professional, Advocate and Commercial Arbitrator. Before starting in the practice I held various senior management positions in the Financial Services Industry in Organizations like IFCI Financial Services, Edelweiss AMC, Birla Sunlife , SBI AMC and have over 24 years of working experience in the Financial Services Industry and 3.5 years as an Insolvency Professional.

How did you decide to become an IP?

At the onset of the IBC code , Since I was a part of the Financial Services Industry and had exposure to Lending and also debt recovery also a Law Degree, I saw a good opportunity of IBC practice emerging as a multi disciplinary practice where Corporate Defaulters are rehabilitated with a new management and debt brought down to optimum level, or if the revival is not possible the Corporate Debtor is liquidated to free up the funds stuck in them of Banks, Financial Institutions and other creditors to the maximum extent possible and in a time bound manner. Hence I decided to take a plunge in this practice leaving my Job.

How many assignments (CIRPs and liquidations) have you undertaken so far? If possible, could you share the names?

I have handled 14 assignments so far across Industry Segment. Namely. (As IRP/RP/Liquidator)

1) AML Steel and Power Limited.
2) Euro Pallets Pvt. Ltd.
3) Conros Steels Pvt. Ltd.
4) Salvi Chemicals Ltd.
5) Kaizen Power Pvt. Ltd.
6) Neocrop International Limited.
7) Sacos Indigo Pvt. Ltd.
8) Shree Vaishnav Castings Pvt. Ltd.
9) Sixth Dimension Project Solutions Pvt. Ltd.
10) Oneworld Industries Limited.
11) Firestar Diamond International Pvt. Ltd.
12) Zicom SaaS Pvt. Ltd.
13) Peace Infrastructure Pvt. Ltd.
14) Polylogic International Pvt. Ltd.

How was your experience in the early days as an IP? What were some of the challenges you faced in your initial assignments?

The Profession of Insolvency Professional is a very challenging profession as you have to

1) Verify and admit claims from various creditors of the corporate debtor.
2) Try to keep the company running if it is a running company at the same level of operations.
3) Secure the assets of the company,
4) Conduct an due diligence and transaction audit to determine if there are avoidable
transactions under the code and file applications with NCLT in those cases.
5) Try to find a new owner for the company which is not related to the present owners and
management and compliant u/s 29A.

This requires a lot of tact and at the same time a high degree of integrity to ensure that all the provisions of the code is complied with . The biggest Challenge an IP faces most of the time is to get cooperation from the Suspended Directors and KMPs of the corporate debtor as since the company will go out of their hands they really have no benefit in cooperating with the IP other than their legal obligation under the code to do so. Therefore the IP may face various kinds of non cooperation and even at times harassment from such promoters. Further the IP is constantly under scrutiny of Regulator, Stakeholders, and also the Suspended Directors and KMPs. His conduct has to be absolutely transparent and his duty is to uphold the provision of the code and find a re solution to the Corporate Debtor. This makes the Profession very challenging.

Which has been the most interesting/challenging/memorable assignment for you so far?

Each case has its unique challenges and I don’t think I can differentiate and pinpoint that this was most challenging. However AML Steel and Power which was one of my first assignments as and IRP/ then RP was very challenging as there was no cooperation and active obstruction from the Suspended Directors and it took a lot of effort to find a Resolution Applicant and successfully resolve the company. The case was very legally challenging and a lot of litigation had to be indulged into to get cooperation from the suspended management , Local Government Authorities , Villagers where the Factory of the company was situated in Jharkhand. Of course there have been other cases which have been equally challenging.

What have been the unexpected parts of being an IP? How have you dealt with them?

As the Insolvency Law and Regime is constantly evolving , there are new regulations coming in very frequently which are increasing the duties and compliance burden of the Insolvency Professionals many fold. However IBC being a relatively young Legislation this is expected to happen and it is happening and as Insolvency Professionals we have to continuously upgrade our skills and also stay updated with the changing environment.

How do you think IBC has evolved so far? Where has it faltered, and where do you think it has a scope to do better?

As a Code IBC is indeed a landmark and reformative legislation and it has increased the ease of doing business in India. As it is a relatively young legislation it is constantly evolving due to changes in the Parts of the Act., Rules and Regulations and also various judicial pronouncements. The only place where it is faltering in my view is the pace of work at the National Company Law Tribunal Benches which are due to scarcity of Judicial and Technical members and support staff are not able to cope of with the number and variety of issues coming in front of them for decision under the Act. The Act did not envisage in the first place that the NCLTs have to Adjudicate to see that what is the cause of the default, rather they were to satisfy themselves that default has occurred based on the evidence produced by the Applicant and admit the application in 14 days’ time. However using the Principals of Natural Justice the NCLTs sits on Judging whether the default has occurred and reasons thereby applications to get admitted takes more than 6 months at times due to various adjournments. Similarly, NCLT needs to satisfy itself that a Resolution Plan has been approved as per the provisions of the code by the requisite percentage of COC members and thereby accord their approval for the resolution plans, yet resolution plans get embroiled in lengthy discussion at the NCLT level at times taking more than a year to get passed. Similarly Liquidation applications duly approved by the COC or filed by the RP at the close of 270 days without getting a resolution plan which was approved by the COC often takes months to pass the orders and this delay is frustrating the whole objective of the Parliament in legislating the code as a faster mechanism of resolving Corporate stressed debt. I feel the Honorable NCLT Benches times will be better utilized in Adjudicating on the matters of law that may come up before them via S60(5) applications, Also the PUFE Transaction Avoidance Applications needs to be looked at in urgency so that the wrongdoers are held accountable and recoveries can be made from such people faster. This would in my humble view serve the purpose of the Code better. Also the bench strength of NCLTs needs to be urgently increased and perhaps in my personal view preference should be given to younger people to become Judicial or Technical member and a career path for them to progress to higher levels of Judiciary based on their performance in the Tribunals rather than appointing retired Civil Servants and Judges to the NCLT who are any way doing a post retirement Job. The energy levels will differ.

Do you think technology could play a role in helping IPs perform their job better?

Technology always has a role to play in any profession as it increases the efficiency of that profession. Therefore of course as technology improves various platforms are available to the RPs it will surely help the profession. However, the technology providers need to make their interfaces end user friendly the architecture has to be simple to use and effective. What I see
happening is endeavors to make an all-encompassing platform which is frankly making them user unfriendly.

What advice do you have for the professionals considering becoming an IP?

Firstly I must caution that this is a long term profession and not a post retirement profession as it is being made out to be , at present. What is needed is high energy professionals experienced in their respective fields (that gets taken care by the experience criteria as per the IBBI regulations for becoming an IP) who will devote their full time or substantial time to this profession , Also the would be IPs need to understand that as things stand today there is a Gestation period till you get your first assignment. And you must be equipped to bear that period. Professional and Personal Integrity and continuous upgradation of ones knowledge is
paramount in this profession. The would be IP should also factor in the risks in this profession and is he willing to bear it. So though it looks like a low hanging fruit to many but once you are in this profession you realize it is in fact a very challenging and stressful profession as you’re not merely doing debt restructuring for the Promoters you are actually doing much more than that and at every step you have to walk a very tight rope and do an balancing act where you are not only being Just, fair, ethical and a play by the rule book person, but you must be seen to be so by the Market.


Disclaimer: This interview was conducted over email and according to Mr. Ray’s wishes, his answers have been reproduced verbatim. The views expressed are his own.

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