New regime introduced for valuers and valuation

By Rudra Kumar Pandey and Vishal Nijhawan, Shardul Amarchand Mangaldas & Co
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Several streams of professionals currently render valuation services, and their conduct is regulated by the rules of the respective governing/regulatory bodies of which they are members or with which they are registered.india business

Rudra Pandey
Rudra Pandey

In order to streamline the process of valuation of shares and assets of a company and also the registration of valuers, the Companies Act, 2013, has for the first time introduced the concept of “registered valuers”, under section 247, and the requirement of specific valuation to be undertaken by such a valuer under other provisions of the act. In addition, draft rules on registered valuers were released by the Ministry of Corporate Affairs (MCA) in September 2013. Both section 247 of the act and the draft rules are yet to be notified and are expected to be notified soon.

Section 247 and the draft rules are the result of recommendations by different expert committees, such as the Shardul Shroff Committee and the Chandra Wadhwa Committee, to the MCA. These committees were constituted to suggest a framework for valuation in India.

The recommendations touched on a number of aspects, which included: the qualifications, registration, appointment and model code of conduct for valuers; forms of valuation reports and matters to be covered under them; modality for appointment of valuers; disclosure and confidential filing of final valuation; establishment of an independent regulatory body for valuers; quality improve-ment for valuers; and framing of guidelines for corporate valuation.

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Rudra Kumar Pandey is a partner and Vishal Nijhawan is an associate at Shardul Amarchand Mangaldas & Co. The views expressed in this article are those of the authors and do not reflect the position of the firm.

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