Relevant period for undervalued transactions

Relevant period for undervalued transactions. Provided further that the expression “related party” shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares or completion of such transactions as may be prescribed, prior to the insolvency commencement date; Explanation II.—For the purposes of this section, “financial entity” shall mean the following entities which meet such criteria or conditions as the Central Government may, in consultation with the financial sector regulator, notify in this behalf, namely:— (a) a scheduled bank; (b) any entity regulated by a foreign central bank or a securities market regulator or other financial sector regulator of a jurisdiction outside India which jurisdiction is compliant with the Financial Action Task Force Standards and is a signatory to the International Organisation of Securities Commissions Multilateral Memorandum of Understanding; (c) any investment vehicle, registered foreign institutional investor, registered foreign portfolio investor or a foreign venture capital investor, where the terms shall have the meaning assigned to them in regulation 2 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 made under the Foreign Exchange Management Act, 1999 (42 of 1999); (d) an asset reconstruction company registered with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (e) an Alternate Investment Fund registered with the Securities and Exchange Board of India; (f) such categories of persons as may be notified by the Central Government. (1) In an application for avoidance of an undervalued transaction, the liquidator or the resolution professional, as the case may be, shall demonstrate that— (i) such transaction was made with any person within the period starting from one year preceding the initiation date and ending on the insolvency commencement date; or (ii) such transaction was made with a related party within the period starting from two years preceding the initiation date and ending on the insolvency commencement date. (2) The Adjudicating Authority may require an independent expert to assess evidence relating to the value of the transactions mentioned in this section. (1) In an application for avoidance of an undervalued transaction, the liquidator or the resolution professional, as the case may be, shall demonstrate that— (i) such transaction was made with any person within the period starting from one year preceding the initiation date and ending on the insolvency commencement date; or (ii) such transaction was made with a related party within the period starting from two years preceding the initiation date and ending on the insolvency commencement date. (2) The Adjudicating Authority may require an independent expert to assess evidence relating to the value of the transactions mentioned in this section.