Govtworking on a lawto regulate asset valuers

The Centre is working on a law for asset valuers in a bid to regulate professionals in the field.

When asked if such a law was in the offing, Injeti Srinivas, secretary, ministry of corporate affairs, said, “You have a registered valuer. But you don't have a separate law. We are looking at the possibility of a separate law, like the one for chartered accountants or company secretaries, to regulate this category.” Speaking at a conference on the Insolvency and Bankruptcy Code (IBC) organised by the Confederation of Indian Industry, Srinivas said, “Valuation is at the heart of the entire process. If valuations are faulty, the outcome will be undesirable.” The move is crucial as it will facilitate speedy recovery of money owed to lenders and creditors of defaulting firms.

It will help in discovering the true value of an underlying asset as well as for quick decision-making, both of which are important aspects for turning around failed companies referred under the IBC. Last year, the government had announced that only registered valuers will be allowed to value assets or businesses beginning October 2018. Currently, professionals including civil engineers, merchant bankers and architects undertake valuation of businesses.

At first, the Centre will have standards for valuers and then that could form the basis for a law. There will be meetings with stakeholders to understand issues, he said.

“Valuation plays a crucial role for taking decisions on resolutions under the IBC. Beyond the scope of their work lie critical issues and it is important to regulate valuation activity,” said Shardul S Shroff, executive chairman of Shardul Amarchand Managaldas. The secretary said it (IBC) is stabilising now.