IBBI suspends insolvency professional for a year over fee in Golden Tobacco case

The Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) has suspended the registration of an insolvency professional for one year. In an order dated 21 October 2026, the committee found that he drew a fee of Rs 5 lakh a month as resolution professional of Golden Tobacco Limited without the prior approval of the committee of creditors.

What Happened

According to the order, the NCLT Ahmedabad bench admitted Golden Tobacco Limited into the corporate insolvency resolution process on 7 June 2022. The insolvency professional was appointed resolution professional, the person who runs a company during insolvency, by a tribunal order of 13 May 2024, which said he would be paid according to IBBI guidelines. He served until 30 May 2025, when the NCLAT reinstated the earlier resolution professional.

IBBI rules set a minimum monthly fee based on the size of admitted claims. The order says admitted claims in this case were about Rs 1,556 crore, for which the minimum is Rs 3 lakh a month, and that a higher fee must be fixed in advance by the creditors with recorded reasons.

The professional argued that he had stepped into the shoes of his predecessor, whose Rs 5 lakh fee the creditors had approved, and that tribunal orders had stopped creditors' meetings. The committee held that a higher fee approved for one professional does not carry over to a successor, and that a promise to refund the money later does not replace prior approval. On a second charge, about recovering rent dues owed to the company, the committee accepted his explanation, citing the stay orders of the NCLAT and the Supreme Court.

What It Means

The committee suspended his registration for one year and directed him to deposit the excess fee into Golden Tobacco Limited's bank account within 60 days. The order comes into force 30 days after it was issued and is a completed regulatory action that may be appealed.

For creditors in any insolvency case, the order underlines that the fee paid to a resolution professional comes out of the process and must follow IBBI's fee rules, with any higher amount approved by the creditors beforehand.

Source: IBBI disciplinary order