Financial Daily from THE HINDU group of publications
Thursday, Oct 07, 2004
Financial Daily from THE HINDU group of publications Thursday, Oct 07, 2004 |
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Corporate
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Corporate Governance Guidelines on valuation of corporate assets to be framed Our Bureau
New Delhi , Oct. 6 THE Ministry of Company Affairs is examining the report of an expert group on framing guidelines for valuation of corporate assets and shares in connection with amalgamation, merger, demerger, acquisition and buyback of companies' shares. The recommendations will be implemented in a phased manner, according to the Ministry officials. Regarding the time frame when the guidelines will be in place, sources told Business Line, "It is a very new concept and a thorough evaluation of the report is required before taking any views." An expert group, headed by Mr Shardul Shroff, for recommending guidelines on valuation of corporate assets and shares has suggested that the Chairman of the Audit Committee (CAC) be entrusted with the responsibility of appointment of valuers. This suggestion, according to the experts, comes on account of the recognition that there may be potential conflict of interest between promoters, the management and the company in general, in their objectives for seeking the valuation assessment. The export group has said that the involvement of the CAC, who is always an independent director, would enhance the transparency surrounding appointment of valuers and also support measures of good corporate governance. Besides, this appointment norm has been suggested in the case of all companies — whether listed or unlisted — where an audit committee is appointed for good governance. It has suggested that a chapter on valuers and valuation be added to the Companies Act.
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