Action underway after ED flags Experion deal: IBBI

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) has said it is taking regulatory action on alleged violations in the Gurugram land acquisition case involving Experion Developers, following Enforcement Directorate (ED) claims that the Insolvency and Bankruptcy Code (IBC) was misused by the realty firm while taking over assets of Dignity Buildcon.

In a written reply to Rajya Sabha member Deepak Prakash, the IBBI said it is taking “appropriate action in respect of alleged contraventions by the concerned Insolvency Professional in terms of the relevant provisions of the Code read with IBBI (Inspection & Investigation) Regulations.”

According to ED, during a PMLA investigation against Religare Finvest, it had also attached assets belonging to the corporate debtor, Dignity Buildcon, which was later acquired by Experion.

The ED has claimed a 9.3-acre parcel in Sector 62, Gurugram — attached during the PMLA probe — was secured by Experion Capital (ECPL), a group company of Experion Developers, after it acquired 60 per cent voting rights in the Committee of Creditors (CoC). According to the agency, this influence, combined with support from a creditor holding an additional 35 per cent voting share, enabled the consortium to push through a resolution plan and reap gains.

“ECPL spent 223.92 crore to acquire 60 per cent of the voting rights and influence a member of the CoC who had 35 per cent of the voting rights, and received 334.08 crore from EDPL after the resolution plan was approved. This is a glaring misuse of Section 30(5) of the IBC,” the ED has said.

It has further alleged that the successful resolution applicant (SRA) deliberately stalled the corporate insolvency resolution process (CIRP) until such time as the composition of the CoC and the corresponding voting rights were altered in its favour.

Experion, however, has rejected the claims, calling them “baseless.” A company spokesperson said: “Debt assignments to ECPL were fully paid for, every change was placed before the NCLT, and the updated CoC was publicly reflected on the IBBI website. The law expressly permits a creditor to be a resolution applicant.” The firm also denied allegations that it exerted improper influence on lenders.

Meanwhile, the IBBI informed the Rajya Sabha member that various other issues “raised in the reference require criminal investigation”. “Accordingly, Ministry of Corporate Affairs has been requested to consider ordering an SFIO investigation into the matter.”

The responses suggest that while the ED’s allegations are under scrutiny, both Experion and the authorities maintain that procedural norms were largely followed, and that

ongoing investigations will determine whether any misconduct occurred.