New Delhi, Nov. 6 -- The Enforcement Directorate (ED) and the Insolvency and Bankruptcy Board of India (IBBI) have created a mechanism under which resolution professionals will give an undertaking to the courts stating that the assets of companies undergoing insolvency proceedings attached under the prevention of money laundering act (PMLA) can only be used for the benefit of creditors, such as banks and homebuyers, and shall not flow back to the promoters or other accused persons, the investigative agency said on Wednesday. A circular in this regard was issued by the IBBI on Tuesday, setting a standard operating procedure (SOP) to enable the restoration of assets to the victims. "ED has taken proactive steps to support successful resolution of companies under the Insolvency and Bankruptcy Code (IBC) by enabling the restoration of assets earlier attached under the PMLA. This measure is aimed at maximising value for creditors, including banks and homebuyers. In several insolvency cases, assets of the corporate debtor were under PMLA attachment, which restricted their use in the resolution process," the agency said in a statement. "This process now enables Resolution Professionals to seek release of such assets through applications under sections 8(7) and 8(8) of PMLA (which deals with restitution of properties)," it further said. As a result of this coordinated approach, ED said, "a standard undertaking to be filed by insolvency professionals before the special court has been finalised and circulated by IBBI through its circular on November 4". "The move ensures that: the restituted assets are used only for the benefit of creditors, no advantage flows back to the accused or promoters, full reporting and compliance safeguards remain in place until resolution is completed," it added. ED's latest data reveals that it has already restituted assets worth Rs.34,580 crore to creditors/victims of frauds till date, out of which over Rs.15,000 crore is linked to fugitives Vijay Mallya, Nirav Modi and Mehul Choksi. ED said that the latest initiative "demonstrates that strict enforcement under PMLA and value maximisation under IBC are not conflicting objectives". "Instead, when coordinated, they ensure prosecution of economic offenders while protecting public and creditor interest through lawful resolution. ED remains committed to ensuring that proceeds of crime are not enjoyed by offenders and at the same time recovery value for creditors is enhanced," the agency said. Reacting to the development, senior advocate Vikas Pahwa, said: "The ED's initiative to facilitate the release of attached assets for IBC resolution is a welcome and pragmatic step. It reflects a mature balance between strict enforcement under the PMLA and the objective of value maximisation under the Insolvency and Bankruptcy Code."...