IBBI suspends insolvency professional for 3 months over lender vote count in steel firm case

The Insolvency and Bankruptcy Board of India (IBBI) has suspended the authorisation of an insolvency professional for three months over the way lenders' votes were counted in the insolvency of Shree Bhimeshwari Ispat Private Limited. The order of the IBBI's Disciplinary Committee is dated 30 October 2026.

What Happened

The company's insolvency process began on 28 November 2019 by an order of the National Company Law Tribunal (NCLT), Mumbai Bench, and the professional was appointed its resolution professional on 4 January 2020. According to the order, a resolution plan from Khatav Man Taluka Agro Processing Limited received 61.31% of the votes in the committee of creditors (the lenders who decide on a plan) and 30.37% against, while State Bank of India, with an 8.32% voting share, did not vote.

The IBBI found that the professional left SBI's share out of the total, worked out the result as about 67% of the remaining 91.68%, and declared the plan approved. The law requires a plan to win at least 66% of the voting share of all financial creditors. The committee found that the plan was presented to the NCLT as approved with 67% in favour, without disclosing that SBI's share had been excluded. The NCLT, by an order dated 28 April 2025, held that only 61.31% had voted in favour and sent the plan back to the lenders, which the IBBI said caused avoidable delay. The professional had argued that SBI was absent from the vote rather than abstaining.

What It Means

The order makes clear that a lender that attends a meeting but does not vote still counts in the total when deciding whether a plan has the 66% it needs. The suspension takes effect 30 days after the order. The IBBI will send the order to the committees of creditors of all companies where the professional is working, for their consideration. The order is a completed regulatory action of the IBBI and may be appealed.

Source: IBBI disciplinary order