# IBBI flags misuse of insolvency law to evade taxes, hide assets 2026-08-16T18:22:18+00:00 | Governance | Indian Opinion Desk Corroboration: 2 independent outlets The Insolvency and Bankruptcy Board of India (IBBI) has warned that companies are misusing the corporate insolvency resolution process to evade taxes, conceal assets, and avoid regulatory or criminal action. In a discussion paper released on Friday, the regulator said law enforcement agencies have found cases where the IBC was invoked with malicious intent to settle private debts, facilitate undisclosed mergers, or shield assets from enforcement. The New Indian Express reports that the IBBI has proposed making insolvency professionals more responsible for identifying and reporting such abuse. The Times of India adds that the regulator has listed at least nine red flags, including shell companies with little business activity, large unexplained related-party loans, and cases where a single creditor dominates the process. Other warning signs include auditors unable to verify assets and minimal creditor participation. The IBBI has invited comments from stakeholders on the proposed measures, with a deadline of August 24, 2026. Under the plan, insolvency professionals who detect fraud or malicious intent would be required to report the case to the National Company Law Tribunal for action. ## Coverage - newindianexpress.com - timesofindia.indiatimes.com This story was synthesised by AI from the 2 sources linked above. Updated: this story now draws on 2 sources. Last updated 2026-08-17T02:43:02+00:00. Tags: IBBI, IBC, Insolvency and Bankruptcy Board of India Canonical: https://indianopinion.org/ibbi-flags-misuse-of-insolvency-process-to-evade-taxes-conceal-assets/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/ibbi-flags-misuse-of-insolvency-process-to-evade-taxes-conceal-assets/#story-in-brief How this brief was made: an AI model read the reports linked above and wrote this summary and analysis, which were published automatically. Published briefs are sampled every hour by an automated quality check; the editor verifies its findings and approves corrections, and corrected briefs carry a dated correction line. Stance labels are editorial classifications of how each outlet framed this story, assigned by the same model, not ratings of the outlets. We do no original reporting. Methodology: https://indianopinion.org/ai-use-policy/