Valuation of properties: SECP proposes to abolish procedure for appointment of valuators

The Securities and Exchange Commission of Pakistan (SECP) had proposed to abolish procedure for appointment of valuators for valuation of properties by registered valuators. The SECP has proposed amendments in the Companies Act 2017 in this regard.

Under the existing procedure where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provisions of Companies Act, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be specified. The valuator appointed shall make an impartial, true and fair valuation of any assets which may be required to be valued; exercise due diligence while performing the functions as valuator and not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time before submission of the report.

The valuator shall prepare his report in such manner and applying such approaches, as may be specified. If a valuator contravenes the provisions of this section or the regulations made there under, the valuator shall be liable to a penalty of level 2 on the standard scale: Provided that if the valuator has contravened such provisions with the intention to defraud the company, its members or creditors, he shall be punishable with imprisonment for a term which may extend to one year and with fine which may extend to five hundred thousand rupees.

Where a valuator has been convicted he shall be liable to refund the remuneration received by him to the company; and pay for damages to the company or to any other person for loss arising out of incorrect or misleading statements of particulars made in his report.

The registration as valuator under this section shall be liable to be cancelled by the Commission on such grounds and in such manner as may be specified after providing an opportunity of being heard, SECP added.