Insolvency regulator IBBI has suspended the registration of Vishwanath Sridhar Prabhu as a “registered valuer” (RV) for his role in the misconduct committed by fraud hit Punjab and Maharashtra Cooperative Bank Limited (PMC Bank).
Prabhu’s registration as a RV will be suspended till he is exonerated of the charges against him, IBBI said.
IBBI has also declared him not ‘fit and proper’ to be eligible as a RV and noted that pendency of the criminal proceeding against Prabhu — who was in judicial custody —had adversely affected his integrity and reputation.
The government had on January 25 this year notified the scheme of amalgamation of PMC Bank with Unity Small Finance Bank (USFB). All the branches of the PMC Bank are now functioning as branches of Unity Small Finance Bank. The scheme of amalgamation envisaged takeover of the assets and liabilities of the PMC Bank, including deposits, by USFB.
Prabhu, a member of the IIV India Registered Valuers Foundation, was registered with the Insolvency and Bankruptcy of India (IBBI) as a registered valuer in the asset class of securities and financial assets.
It maybe recalled that a charge sheet for offences under various sections of Indian Penal Code was filed against Prabhu by the Economic Offences Wing, Mumbai for his alleged role in the misconduct committed by PMC Bank. The IBBI has noted that the limited issue for consideration before it was whether the pendency of criminal proceedings impacts the integrity and reputation of the registered valuer and whether the same affects his eligibility for continuing as RV.
The IBBI has now held that pendency of criminal proceeding does impact the integrity and reputation of registered valuer. The IBBI order in this case noted that that the foundation of valuation services in a market economy lies on a mutual trust between the valuer and the stakeholders.
“Based on the professional opinion of a valuer, for the purposes of corporate insolvency resolution process, CoC takes prudent commercial decisions. Therefore, it becomes crucial to engender as well as maintain the reputation and integrity of the valuation profession and the trust of the stakeholders so that the decision makers in the market have adequate comfort to take any crucial economic decision without any fear or doubt,” the IBBI has said.