IBBI requires disclosure of beneficial ownership in resolution plans

In a notification from IBBI, a new provision has been added to the scheme that deals with the mandatory content of the resolution plan. | Photo credit: lakshmiprasad S

In a notification from IBBI, a new provision has been added to the scheme that deals with the mandatory content of the resolution plan. “Each resolution plan will include a beneficial ownership statement, containing details of all natural persons who beneficially own or control the resolution applicant, together with the shareholding structure and jurisdiction of any intervening entity,” the notice said. An affidavit must also be filed as to whether or not the settlement applicant is eligible for the benefit under section (32A) of the IBC, which deals with ‘Liability for prior offences’.

The amendments are crucial given last year’s Supreme Court ruling on the liquidation of Jet Airways after the Jalan-Kalrock Consortium (JKC) failed to implement the resolution plan. The ruling suggested reforms, including ensuring the quality and seriousness of resolution proposers.

The changes will take effect from December 23.

“The Seventh Amendment to the CIRP Regulations raises the bar for transparency in the Indian insolvency space. With mandatory beneficial ownership disclosures and affidavits under Section 32A, IBBI is demonstrating zero tolerance for opaque bidding – providing clarity to creditors and reducing post-resolution disputes,” said Parvesh Kheterpal, General Counsel at Ampyr Energy.

Ruby Singh Ahuja, Senior Partner at Karanjawala & co, feels greater transparency by helping to identify hidden or complex ownership structures, preventing the entry of promoters or parties with questionable backgrounds into the resolution process.

Clean slate protection

Experts also said the requirement for an affidavit is important from a forensic perspective. “It ensures that the ‘clean slate’ protection against prior liability is granted only after rigorous investigation, preventing ineligible promoters from re-entering through the back door,” said Srinivasa Rao, partner at Nangia Global. Further, this amendment shifts the paradigm from simple compliance to deep transparency, giving creditors and the judiciary a crystal-clear view of who they are entrusting with the corporate debtor, he added.

According to Ahuja, the amendments, which relate to vetting of resolution applicants for section 32A immunity, prevent the abuse of legal protections intended for legitimate resolution applicants and provide clarity to the Committee of Creditors (CoC) and the courts on the suitability and background of the resolution applicant.

Published on December 24, 2025