RV made Valuation Report without Verification: IBBI Suspends Registration of Valuer [Read Order]
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The Insolvency and Bankruptcy Board of India (IBBI) has suspended the registration of valuer Registered Valuer (RV) Since he made the valuation report without verification.
The Insolvency and Bankruptcy Board of India (IBBI/Board) has been delegated by the Central Government to perform the functions of the Authority under the Valuation Rules. Mr Ajay Kumar Chakrabarti is registered with IBBI as a valuer of Plant and Machinery Assets (P&M).
Based on the findings of an inspection, if the authorised officer is of the prima facie opinion that sufficient cause exists to cancel or suspend the registration of a valuer, it shall issue an SCN to the valuer.
An Inspecting Authority (IA) was appointed to inspect the valuation report submitted by Mr Ajay Kumar Chakrabarti in the Corporate Insolvency Resolution Process (CIRP) of RNB Cements Pvt. Ltd (Corporate Debtor/CD) to examine compliance with section 247 of the Companies Act, 2013 read with relevant provisions of the Valuation Rules.
It was viewed that sufficient cause exists to consider actions under sub-rule (5) of rule 17 of the Valuation Rules and accordingly SCN dated 2nd February 2023 was issued to RV for contravention of rules 8(3)(g),(h) and (j), and clauses 6, 7 and 8 of Model Code of Conduct specified under Annexure-I of the Valuation Rules.
It was observed that the RV in his report has stated that he has neither verified the record nor has he conducted the complete physical verification of assets. This, according to the Board, leaves a wide scope for undervaluation or overvaluation of assets.
The Authority noted that the assumption made in the valuation report reflects that the RV has not verified the records relating to the assets and has also not conducted the physical verification of assets in the premises of the CD.
It was viewed that the submission of the RV seems to be an afterthought to only defend the observations made in the inspection report. Therefore, the same cannot be accepted as a valid counter to the allegations made in the SCN.
It was alleged in the SCN that the RV should have invariably considered the above factors in the valuation, especially when the CD is a Cement Plant located in the country's environmentally and strategically sensitive North-eastern Region. By ignoring the above facts, the RV has missed an important aspect of valuation.
The IBBI observed that the document being read does not pertain to the realm of fiction; on the contrary, it has to be made abundantly clear that the document and findings are based on scientific scrutiny of corroborative evidence and facts on the ground.
After considering the allegations made in the SCN and the materials available on record, the Authority suspended the registration of Mr Ajay Kumar Chakrabarti bearing registration number - IBBI/RV/02/2019/12153, for a period of six months.
To Read the full text of the Order CLICK HERE
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