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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

After the PPIRP commencement date of Yamuna Foods Ltd, its director manages the company's affairs intending to defraud creditors. On the resolution professional's application, what penalty may the Adjudicating Authority impose on the officer?

On the resolution professional's application, the Adjudicating Authority may impose a penalty of not less than one lakh rupees and up to one crore rupees on an officer who manages the corporate debtor's affairs with intent to defraud creditors after the pre-packaged commencement date.

  1. ANot less than one lakh rupees but up to one crore rupeesCorrect
  2. BNot less than ten lakh rupees but up to one crore rupees
  3. CUp to one lakh rupees only
  4. DImprisonment only, with no monetary penalty

Explanation

Section 67A empowers the Adjudicating Authority, on the RP's application, to impose a penalty of at least one lakh rupees and up to one crore rupees on an officer fraudulently managing the debtor. Other ranges misstate the floor or cap, and the section provides a penalty, not imprisonment.

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