Valuation professionals who are not registered with the insolvency regulator, Insolvency and Bankruptcy Board of India (IBBI), have been virtually put on notice, with its chairman MS Sahoo making it clear that they will not get a “free walk-in” to the new institutional framework that would be put in place in the coming days.
“We have successfully resisted reforms in valuation in the last 50 years. This is your last chance and, if you do not move, you will not get another chance,” said Sahoo at the Global Valuation Summit 2019 in New Delhi on Friday .
“If you don’t want any discipline, any regulation, but only enjoy the benefits, that will not work out. You have to give something if you want to take something.”
IBBI is currently the nodal body for implementing the regulations for valuation professionals used by companies operating in India.
There is already a framework where nearly 3,000 valuation professionals are registered with the IBBI as ‘registered valuation professional’, and there are also 11 registered valuation organisations.
However, there are thousands of other people who continue to practice as valuation professionals without getting themselves registered with the IBBI, and it is this set of people that Sahoo was referring to who are resisting the change.
Registered valuer
Later, Sahoo told BusinessLine that a section of people who have not registered themselves as ‘registered valuer’ (RV) want to simply move into the proposed institutional framework without being subjected to any tests or regulatory norms.
“A section of existing people, who are not RVs, are saying that they be registered without examination in the proposed new institutional framework. When the new framework comes, there must be some discipline and free walk-in will not be allowed. There has to be a process to comply. No point resisting change,” said Sahoo.
Sahoo is the chairman of an eight-member expert panel set up by the government to examine the need for an institutional framework for regulation and development of valuation professionals. This panel is expected to give its report in the next couple of months.
The thinking in the government and the IBBI is to have a separate statutory framework for ‘valuation professionals’ on the lines of statutes governing chartered accountants, lawyers, and company secretaries.
Sahoo also stressed the need for continued professional education to ensure that valuation professionals remain relevant and are not replaced by machines. He warned that machines will finish the valuation profession like they have done in the case of other activities in the recent years.
The IBBI Chairman wondered as how the valuation profession, which has had a long history in India, had never come under any legislative framework till date. “It is probably because we remained happy with the subsistence level of valuation services. We did not want to get respectability of society. Time has come to change this,” he said.