In amendments published yesterday (23JUL19) relating to Regulations
covering Insolvency Professionals (IP) and the three Agencies (IPA) that register them , the Insolvency and
Bankruptcy Board of India (IIBI) has brought into play two major changes .
- 1. No IP may take up an assignment without the concurrence of its Agency.
- 2. The Agency shall not give concurrence to any IP above the age of 70.
In this note my focus is on the
second change-
As an affected IP, with respect
to the age bar, I have been thinking hard to appreciate the logic of the age
bar. Two critical requirements of an IP as stated in many a discussion paper
are that (1) s/he should not be in employment and (2) that s/he should have a
minimum experience to be able to understand the nuances of the business. Many
an early applicant taking the test were senior retired Bankers and (like me)
professional managers with over 15 years of work experience. I viewed this Code
as an opportunity to contribute to restructuring businesses. The freedom from a
regular employment, and also the financial security at this age (after having
worked at a CEO level for decades) are two strong reasons to expect a focused
approach from persons like us.
Just because “…a few elderly IPs
have sought discharge from the responsibility on account of health issues” [1]
, the Board decides to place an age limit is a travesty of justice. If the
statement above is true, then this proves the responsibility and maturity of
the individuals concerned, and is NOT a general situation that all above 70 are
incapacitated. These few elderly IPs
have on their own accord decided to call it a day. They need not give reasons
even if it were due to health .It is a voluntary act. Professionals like lawyers,
Doctors, Advisors, Counselors, Senior Adjunct Faculty in Academic Institutions
etc have no retirement ages. There is no need for me to prove this statement by
giving examples.
Another
reason highlighted in the Discussion note is a comparison with the CA
regulation on MDs. The age cap in the CA is certainly not based on health or
capability grounds, but more to do with the harm of long term incumbency. The
IP on the other hand is a Professional in the market place, selected by the
client on his own volition.
Retirement in Organizations – Government, Corporations etc., serve a
very useful purpose. In an Organization there is a hierarchy and aspirations of
individuals within the Organization to climb up the ladder. A Professional on
the other hand competes with himself. As long as s/he thinks s/he can
contribute to a cause they are relevant. Else, the reality of the market place
would sideline them. There is no need for an age stipulation. The market is
perfectly able to take a call on hiring IPs.
The Senior Advocates in the Supreme Court, the reputed Doctors in Hospitals,
the reputed columnists in journalism, the Senior Adjunct Faculty in Academic
Institutions are living examples of why seniority has its role and need. To
dispense with them on account of “physical” capability is indeed unfortunate
and presumptuous.
To expect (as the Discussion paper states) that the over 70 Years IPs
may act as advisors to their younger colleagues, is naïve at the least and adds
insult to injury. Which Financial or Operational Creditor would like to pay for
the services of two IPs? Also, which 70+ IP would like to play second fiddle to
someone else years junior to him/her? In my long years of professional
management I have witnessed first- hand the importance the bureaucracy places
on seniority. Why should professionals be any different?
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