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MS Sahoo Panel proposed National Institute of Valuers for institutional framework for valuers

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The government-appointed 8 member committee of experts headed by IBBI (Insolvency and Bankruptcy Board of India) Chairperson M S Sahoo has submitted a report on “valuation professionals” and proposed an institutional framework for valuers by setting up National Institute of Valuers (NIV). In this regard the committee has submitted its report to the Government of India on March 31, 2020 along with Draft Valuers Bill, 2020, recommending to establish a National Institute of Valuers, which is now open for comments till May 14, 2020. It should be noted that a valuer is a professional who carries out inspections in order to help determine the current market value of property and/or land.National Institute of Valuers IBBIKey Suggestion in Report:

-NIV will act as a statutory body responsible for the development and the regulation of the valuation profession in India and registration and regulation of valuers, valuer institutes and valuation professional organisations (VPO).

-An Establishment of dedicated cadre of valuers is needed, who would render valuation services, after registration with the NIV.

-The proposed cadre of valuers (like chartered accountants, etc) will include both the current practitioners and freshers wishing to have a career in valuation.

Need for NIV:
Proper valuation of a company is also a crucial part of any merger and acquisition. As of now, there is no standardized formula for valuing these assets of stressed companies worth thousands of crores who are up for sale under the Insolvency and Bankruptcy Code (IBC). Also there is no proper regulatory framework governing the valuation profession.  Currently, only an ad-hoc framework for valuation professionals is in place, which is basically governed by the Companies Act,2013.

Background:
The panel was constituted by the  Ministry of Corporate Affairs (MCA) on August 30, 2019 to examine the need for an institutional framework for regulation and development of valuation profession.

  • The members of the panel included Presidents of the three professional institutes – ICAI, ICSI and ICoAI; B Sriram, former MD & CEO of IDBI Bank; Prof. R Narayanaswamy, Professor, IIM Bangalore and Ajay Bahl, Founding Partner, AZB & Partners, a law firm.