IBBI suspends liquidator for two years over SBI vote cut in Manglam Fiscal case
IBBI suspended an insolvency professional for two years, finding the liquidator cut SBI's voting share to block its own replacement in Manglam Fiscal Services' liquidation.
Key points
- IBBI's Disciplinary Committee suspended an insolvency professional's registration for two years on 12 November 2026.
- IBBI found the liquidator cut SBI's voting share from 67.87% to 5.62% without the tribunal's direction, to prevent replacement.
- The suspension takes effect 30 days after the order; creditors' committees must replace the professional in current cases.
The Insolvency and Bankruptcy Board of India (IBBI) on 12 November 2026 suspended the registration of an insolvency professional for two years, finding that, as liquidator of Manglam Fiscal Services Private Limited, the professional altered State Bank of India's voting share to stop the bank from having the liquidator replaced. The order takes effect 30 days after it was issued.
What Happened
According to the order, the National Company Law Tribunal's Kolkata bench put Manglam Fiscal Services into liquidation on 16 January 2025, and the professional was appointed liquidator on 24 April 2025. A liquidator sells a failed company's assets and pays creditors, consulting a stakeholders' committee.
IBBI's Disciplinary Committee found that on 21 May 2025 the liquidator raised SBI's admitted claim to about Rs 865 crore, including a corporate guarantee, lifting the bank's voting share from 5.62% to 67.87%. On 20 June 2025, SBI sought the liquidator's replacement. The liquidator did not place the proposal before the committee and, on 8 July 2025, cut SBI's claim back to about Rs 24.39 crore and its vote to 5.62%, without the tribunal's direction that the rules require, the order said.
The committee also found no stakeholders' meeting was held for six months, from July 2025 to January 2026, until the tribunal directed one. It held that the increase and the later reduction in SBI's voting share "were motivated with an intent to prevent his replacement" and called them serious departures from a liquidator's duties, not technical lapses.
The stakeholders voted with 88.78% on 19 February 2026 to replace the liquidator, and the tribunal appointed a new one on 9 June 2026. SBI's claim was then admitted in full, according to the order.
What It Means
During the suspension the professional cannot continue existing assignments, and creditors' committees must replace them. The order is a completed regulatory action and may be appealed.
For banks, homebuyers and other creditors, the order confirms that a liquidator cannot change creditors' claims or voting shares without the tribunal's direction, and must hold stakeholders' meetings on the schedule the rules set.
Source: IBBI disciplinary order
Sources & Citations
- IBBI disciplinary order — Insolvency and Bankruptcy Board of India