The Insolvency and Bankruptcy Board of India has recently disposed a Show Cause notice issued to the issued to the Chief Executive Officer of the Association of Certified Valuators and Analysts (ACVA), warning that it should be extremely careful and diligent in its organisational processes and follow the directions of the Authority in letter and spirit.
ACVA was recognised by the Insolvency and Bankruptcy Board of India (IBBI) as a registered valuers-organisation vide recognition number IBBI/RVO/2018/009.
The IBBI had conducted an inspection of the affairs of ACVA and based on the findings of the inspection, the authorised officer, observing sufficient reasons exist prima facie, as per the provisions of the Valuation Rules and accordingly it issued a Show Cause Notice (SCN) on 20th September 2022 to the Chief Executive Officer of the ACVA.
As per provisions of the Valuation Rules, it is the duty of a registered valuer organisation to provide information about its activities to the Authority (i.e. IBBI). It was alleged in the SCN that ACVA was using office space of Knowcraft Analytics, a sister concern, without any rent agreement. During the inspection, ACVA had submitted that there were no agreements between Knowcraft Analytics and ACVA. It was intimated then, that the Office of RVA had shifted to another place, which was not intimated to the authority.
ACVA in its response has submitted that they do have a rent agreement with the owner of premises for the office and furnished the same before the board. The Board, however, observed that there was a delay of six months in intimating the authority of the change of address.
In view of the same, ACVA was found to be in violation of point 6(2)(g) of clause IV of Part II of the Governance Structure and Model Bye Laws for registered valuers organisation provided in Annexure-III of the Valuation Rules.
In regard to allegedly providing false and incorrect information about the constitution of Disciplinary Committees and Appellate Panel, to the Inspecting Authority, it was observed that the act is in violation of rule 21 of the Valuation Rules. In reply, the ACVA submitted that the Manager had joined the organisation only on 20th September 2021 and the CEO had joined on 27th January 2022.
There were various organisational changes and therefore mails were sent to and guidance was sought for from IBBI. It was also submitted that there was no intention to violate the provisions, by providing incorrect information.
The reasons provided by the ACVA were noted for further follow-up.
Observing that, “The organisational process must not be affected by the transience of its functionaries”, the IBBI Whole Time Member Sudhaker Shukla warned the ACVA and noted, “the functioning of the ACVA shall be reviewed for compliances in next six months of this Order by the RVO Division and any noncompliance by the ACVA should be examined on merits”.
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