AaRVF Guilty of Misrepresentation in Enrolling Ineligible CFA Candidate: IBBI Suspends Recognition for Two Years [Read Notification]

The Insolvency and Bankruptcy Board of India (IBBI) has suspended the recognition of Assessors and Registered Valuers Foundation (AaRVF), in violation of the Companies (Registered Valuers and Valuation) Rules, 2017, for enrolling and recommending an ineligible candidate for registration as a valuer for a period of two years.

The case arose from a grievance filed by Mr Manish Bohra, a Chartered Financial Analyst (CFA) (USA) charter holder, who alleged that AaRVF misled him into believing he was eligible to become a registered valuer in the Securities or Financial Assets (SFA) category.

AaRVF is a Registered Valuers Organisation (RVO). In 2023, Mr Bohra approached AaRVF seeking enrolment as a valuer member. Despite his qualification not being listed under Rule 4, read with Annexure-IV of the Valuation Rules, AaRVF admitted him as a “Primary Member” and allowed him to undergo the mandatory 50-hour training program and valuation exam.

His application was later forwarded to IBBI, but was returned with the remark that his qualification was not as per the Rules.

Mr Bohra alleged that AaRVF fraudulently convinced him of eligibility, collected fees, and facilitated his training and exam, only for his application to be rejected. He claimed this amounted to misrepresentation and cheating.

AaRVF argued that it acted in good faith, relying on Mr Bohra’s assurance that he would obtain an equivalence certificate from the Association of Indian Universities (AIU) to validate his CFA qualification.

It cited the precedent of another member, Mr Pramod Prabhakar Jha, whose CFA from ICFAI Tripura was accepted by IBBI. AaRVF claimed this precedent justified provisional enrolment of Mr Bohra, subject to submission of the equivalence certificate.

AaRVF further alleged that Mr Bohra failed to disclose material facts, including prior rejection by another RVO, and levelled unfounded allegations of fraud without evidence. It maintained that his enrolment was conditional and transparent.

The IBBI rejected AaRVF’s defence. It noted that Rule 14(c) of the Valuation Rules requires RVOs to admit only individuals who possess prescribed qualifications and experience. The Rules do not permit provisional or conditional membership. CFA (USA) is not listed as an eligible qualification under Annexure-IV for the SFA asset class.

The Authority clarified that Mr Jha’s registration was based on his postgraduate qualification in finance, not CFA alone. AaRVF’s reliance on his case as precedent was therefore misplaced and misleading.

The Authority also highlighted that Mr Bohra himself had sought confirmation of eligibility before enrolling, expressing concern that his application might later be rejected. Despite this, AaRVF proceeded to enrol him, demonstrating undue haste and lack of due diligence.

The Authority further observed that reliance on FAQ No. 74 regarding equivalence certificates was incorrect. The FAQ applies only to foreign degrees recognised by AIU, not to professional qualifications like CFA. Since CFA (USA) is not recognised by AIU, the equivalence certificate route was not applicable.

The IBBI held that AaRVF contravened Rule 4 and Rule 14(c) of the Valuation Rules, as well as governance provisions under Annexure-III, by enrolling an ineligible candidate and forwarding his application to IBBI. It concluded that AaRVF’s actions amounted to misrepresentation and undermined the integrity of the registration process.

IBBI suspended the recognition of AaRVF for a period of two years, and directed the AaRVF to refund all the payments made by Mr Manish Bohra to AaRVF. It was further held that the AaRVF shall not enrol any new members during this period of suspension and AaRVF can only provide its services during the period of suspension to the members already enrolled with it.

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