The Indian Institute of Corporate Affairs (IICA), Manesar, held a specialist lecture for its Post Graduate Insolvency Programme participants exploring how India’s anti-money laundering framework interacts with its insolvency law. The session was led by Shri Balesh Kumar, a member of the Appellate Tribunal overseeing money laundering cases. The discussion highlighted practical challenges when assets of struggling companies become frozen during investigations.
What was covered
The lecture, titled “PMLA–IBC Interface: Emerging Bonhomie,” examined the relationship between the Insolvency and Bankruptcy Code, 2016 and the Prevention of Money Laundering Act, 2002. Shri Kumar explained how money laundering operates through three stages: Placement, Layering and Integration. He discussed how hawala transactions feature in financial investigations and covered specific provisions of the PMLA including Sections 3, 4, 5, 8, 44 and 45.
A key focus was Section 32A of the Insolvency Code, which deals with cases where corporate assets face freezing under money laundering laws while the company is undergoing insolvency resolution. Shri Kumar traced how courts have gradually developed an approach to balance the goals of insolvency proceedings—reviving or liquidating distressed companies efficiently—with the enforcement of anti-money laundering rules.
IICA’s Director General emphasised that despite precise legal language, implementing these two frameworks together remains challenging in practice. The lecture also stressed that professionals in this field need understanding across multiple areas: insolvency procedures, financial investigations, asset tracing and regulatory compliance.
What this means for you
If you work in insolvency, banking, financial investigation or corporate law, understanding how these two legal systems interact is now essential. When a company enters insolvency proceedings, its assets may simultaneously become targets of money laundering investigations, creating complications for creditors and resolution professionals. This session demonstrated that courts are developing clearer guidelines, but the field remains complex and evolving.