COMPANIES (VALUERS & VALUATION) RULES, 2017 WILL LEAD TO CORRUPTION & MORE NPAs, CAUTIOUS VALUERS ASSOCIATION

Ludhiana, October 14, 2018: The Valuers Association (Regd.) along with various representatives of other associations from Chandigarh, UP, Uttrakhand, Rajasthan, Delhi NCR, J & K, Haryana, Maharashtra & other states shared the platform organised Press Conference at Ludhiana, Punjab against arbitrary Clauses & Conditions for existing Govt. Approved Valuers in Companies (Registered Valuers & Valuation Rules) 2017 as notified by Ministry of Corporate Affairs without considering the objections sent by thousands of stake holders. According to the ‘Association’, the new rules will lead to corruption & unethical practises as well as give way to incompetent persons to practise the profession of Qualified Technical Degree holders, ultimately leading to more NPAs.

Er. Kapil Arora, Gen. Secy, VA & Er. Deepak Sood Gen. Secy, Rajasthan Council of Income Tax Valuers informed that since 2007 as per Act of Parliament, it is mandatory for all banks to get valuation from Valuers Approved under WT Act, 1957 only and the experience required for any technical graduate degree holder to become Govt. Approved Valuer is 10 years which is double than as mentioned in impugned Companies Valuation Rules, 2017. The banks have empanelled fake/invalid degree holders as well as ineligible persons as valuers due to which the profession has deteriorated since 2007. Instead of sorting out this issue, the valuers are being forced to become member of Private Organisations and do course of 50 hours being conducted by them, parent bodies of most of which, going against the directions of Hon’ble Supreme Court as well as u/s 22(3) of UGC Act, have been indulged in conducting illegal courses and distributing fake degrees in India. For Such private mediators, it is not mandatory for all directors to have knowledge of Valuation Profession but have been given absolute powers to control highly technical Valuation profession & professionals. Due to this, the quality of Valuation Profession is not going to improve but deteriorate to large extent resulting in Increase in NPAs & corruption in India.

Er. Kulwant Singh Rai, President, Col. Shri Ram Bakshi from Chandigarh & Ar. Saurabh Suman of Uttrakhand said that Valuation of Land & Building/Plant & Machinery is technical in nature. It is beyond our imagination that how 50 hours training which is being conducted in just 6 days for persons having no technical degree will improve the quality of Valuation profession. There is no authenticity of 50 hours training by Private Mediators i.e. RVOs as the records can be manipulated to give advantage to their own well wishers as per their whims & fences. Govt. registered Valuers are not against updation but it should be done directly under any statutory body and that too for new registrations only.

Er. Sanjay Verma from Haryana, & Er. H P Mittal from Delhi NCR said that recently in March 2018, Hon’ble Supreme Court has restrained foreign Advocates to practice in India, however MCA in these rules has permitted foreign Valuers to open their offices and work as valuer which will again deteriorate the quality of Valuation as Indian system of Valuation is different from Valuation system of other countries.

Er. Sunil Puri from Haryana & Er. Satyajit Dhir from Punjab added that IBBI, without even consulting CBDT, statutory body which is controlling the valuation profession since 1957, went to private organisations and finalised the draft just to give monetary benefit to such incompetent organisations. Many organisations are conducting 50 hours have appointed some faculty members having illegal degree in valuation too.

Regarding Major causes of NPAs in India, Er. Kapil Arora & Er. Deepak Sood informed that one of the major causes of NPAs in India is Banking Policies because Banks have lend huge loan amount to corporate sector without mortgaging proportionate Secured assets due to which it has become almost impossible to recover major portion (60-70%) from defaulters. Inflated balance sheets, Re-structuring of NPA Accounts of defaulters & Valuation done by Companies are also main reasons as these valuations are invalid as per Act of Parliament. Recently, Sh. Sahoo, Chairman IBBI has said that only 45 companies owe 50% of NPAs in India. If some more data is collected, 70-75% of NPA in India is due to around 200 Corporate Companies in India and 8.5% NPA is agricultural loan and 7% is Mudra loan. The NPAs in retail sector is just 3.75% which includes NPA due to fake documents including title deeds too. From above, it is crystal clear that the rather than diluting the well defined provisions of Act of parliament, Govt. policies for lending are needed to be amended to improve Bank’s conditions.

Valuers Associations demand roll back/quashing of the impugned provisions of mandatory 50 hours training & membership of private organisation (RVOs) & examination to be conducted by IBBI for existing Govt. Registered Valuers under Companies (Registered Valuers & Valuation) rules 2017. The associations suggested that to improve the quality of Valuation, just like other professions, Govt. Of India may introduce two years of training (in ten years of total experience as enshrined u/s 34AB of WT Act, 1957) under existing Govt. Approved Valuers for new registrations. The policies of Lending by banks must be checked for betterment of conditions of banks. Last but not least, to improve quality & to define proper duties & competency of Valuers, Valuers Bill is need of the hour.