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Women's Day: Meet the women warriors fighting NPA battles

Insolvency professional has in the last four years emerged as a new practice area for many women who are either chartered accountants, company secretaries or cost accountants. But unlike a CA or a CS, the role of insolvency professional is multi-faceted and much more challenging

twitter-logoDipak Mondal | March 8, 2020 | Updated 16:02 IST
Women's Day: Meet the women warriors fighting NPA battles
Insolvency professionals Mamta Binani (left) and Manisha Rawat

Mamta Binani, a lawyer and a company secretary, has a unique first to her name. She was the resolution professional for the first case that was resolved under the Insolvency and Bankruptcy Code (IBC), a new law to deal insolvency and bankruptcy. She oversaw the resolution of the Synergies Dooray Automotive case, the first under the IBC. However, Mamta did not have a dream start as a resolution professional. On the contrary, she could not have had a worse start to her new career. She has been a successful company secretary, was the president of Institute of Company Secretary in India (ICSI) and was on the board of a few companies.

This Visakhapatnam-based Syenergies Dooray, a maker of automotive parts, garage and service station equipment, owed Rs 972 crore to Edelweiss ARC, Alchemist ARC, Millennium Finance and Synergies Castings. The resolution of the case itself made headlines when the banks and financial institutions had to take a hair cut of 94 per cent (financial creditors realised only Rs 6 crore against the claim of Rs 972 crore). As if that was not enough, one of the financial creditors - Edelweiss ARC - moved the National Company Law Appellate Tribunal (NCLAT) against the resolution plan. It requested the NCLAT to scrap the plan, which was approved by 90 per cent financial creditors, alleging that Synergies Casting, being a related party, did not have a voting right but transferred 93 per cent of its debt to Millennium Finance to reduce its (Edelweiss') voting share in the committee of creditors. Edelweiss ARC even accused the resolution professional, Mamta Binani, the past president of the Institute of Company Secretary in India, of siding with the corporate debtor.

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Mamta Binani, who is based out of Kolkata but spends a good amount of time in the national capital as well, nonetheless, came out unscathed, and went on the preside over resolution of more cases - Palogix Infrastructure, Deccan Chronicle, etc. She is currently managing a few more IBC cases as the resolution professional.

Insolvency professional (IP) has in the last four years emerged as a new practice area for many women who are either chartered accountants, company secretaries or cost accountants. But unlike a CA or a CS, the role of insolvency professional is multi-faceted and much more challenging. It requires an IP to not just deal with angry and, at times, hostile creditors, which may also include vendors, homebuyers, etc, but also run a company with the intention of reviving it. And then, there would be litigations against her or her decisions, at times even questioning her ethics and decisions.

"Some decisions may be correct but still there would be litigations. Some of your decisions may go wrong, but may not be malafide, but in such cases there are bound to have litigations. In both these scenarios, if a woman thinks that her name is being dragged into litigations, her name appears in newspaper as litigant, and then she starts losing her sleep and she goes into depression, then this is not the right profession for her," says Mamta Binani.

She says a woman has to understand that this is an economic law, and when so much money is involved people would use all their legal recourse to find out ways and means to come out of the situation. "Her name is being dragged because she is an insolvency professional and not because she has personally done anything wrong," she says.

Women certainly are taking up the role of IP, but the numbers are still very low compared to men. According to the Insolvency and Bankruptcy Board of India (IBBI), out of 2,911 registered insolvency professionals as on 31 December 2019, only 265 or 9 per cent, are women. This is a miniscule number. "There are many challenges which are being faced by the IPs but the gravity of challenges increase when the IP is a woman," says Madhu Juneja, another woman IP, who is handling a half a dozen insolvency cases.

She elaborates that an IP has to take control of the management of the corporate debtor. When the corporate debtor does not want to co-operate with the insolvency professional, the latter has to take help of the metropolitan magistrate, she has to go to the adjudicating authority to ask for police help. Sometimes in those situations, a woman may feel her sex could be an impediment.

Besides, factories are located in far flung areas, and as insolvency professional, she has to get involved in production and administration of these factories. A lot of time, she may feel unsafe travelling to those locations.

Also read: Women's Day: Why corporate boardrooms need more woman power

Manisha Rawat, who is insolvency professional on a real estate company -- Earth Gracia Buildcon Pvt Ltd -- says facing angry homebuyers and rogue real estate promoters can be unnerving for a woman IP. However, Binani says everything is in the mind. "If one thinks that she can do everything, nothing can stop her."

Aside from the usual challenges, there could be other reasons for so few women in the profession. Sunita Umesh, a chartered accountant and a registered IP, says the number (of women as IP) reflects the gender divide in other professions as well. She cites the example of CAs. She says there are around 3 lakh CAs, out of which only 21 per cent are women, many of whom are not practicing.

She also says that given the kind of risk and efforts involved in being an IP, if the remunerations are not good enough, it is not worth taking up the professions. She says she has been empanelled by a few PSU banks as IP but, given the jostle among IPs for cases, the fee can be ridiculously low. "You are offered Rs 25,000-Rs 50,000 a month if you are independent IP," says Sunita.

IPs attached to Insolvency Professional Entities (IPEs) like the big fours audit firms command a higher fee, not those individually working as IPs. Sunita says many women professionals do not want to take that initial pain to establish themselves as IPs. "It is (job of an IP) very high-reporting, high-transparent and high-integrity profession and normally, this factor is not considered when fee of an IRP is approved by the committee of creditors," says Madhu Juneja.

Despite all the odds, many women have taken up the role of insolvency professionals, and as the law settles and its ambit expands, more women would like to take up insolvency profession as a career opportunity.

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