Insolvency regulator IBBI has clamped down on varying practices in the conduct of meetings of the Disciplinary Committee (DC) and the Appellate Panel (AP) of the Registered Valuers Organisations (RVO), which are the frontline organisations for the development and regulation of valuation profession.

It has come up with series of directions to be followed by the DC and AP of the RVO while conducting their meetings including stipulation that meetings be held only if there is an agenda and preferably through a video conferencing facility, keeping in view the current pandemic.

Accordingly, the meeting of the DC will be held for considering the issue or disposal of a show cause notice to a member, said an IBBI circular. The meeting of an AP would be held to consider the issues raised in the appeal filed by the aggrieved against the order passed by the DC, the circular added.

The quorum of the meetings should be as provided in the Bye Laws of the RVO but should be a minimum of two members including the Chairperson. Also, if a member of the committee is related to the person against whom action is proposed by the DC or AP, or there is any other issue of conflict of interest, the member would have to recuse himself/herself from the proceedings, the circular said.

IBBI has now said that it will be the governing Board of the RVO that would be the sole authority for fixing the amount of sitting fee to be paid to the members of the DC and the AP. However, this cannot be less than the amount payable to the independent director as sitting fees.

Also, the tenure of the IBBI’s nominee shall, in general, be for two years from the date of appointment, unless decided otherwise by IBBI.

Governance structure

The latest IBBI directions follow the steps taken by the regulator in April this year to improve governance structure of RVOs. It had then stipulated that the promoter organisation of an RVO cannot appoint its own members —shareholder member in the case of a company, a trustee in case the promoter is a trust and a professional member in case the promoter is a professional body—as independent directors in the RVO. The Government had tasked the IBBI with the regulatory oversight of the RVOs.

Experts’ take

Raj Bhalla, Partner, MV Khini & Co, a law firm, said the latest IBBI move is a worthy step regarding the conduct of meeting of DC and AP because it will be held only if there is an agenda for the meeting. It brings uniformity in the amount of sitting fees to be paid to the members of the DC and AP of the RVOs.

Aseem Chawla, Managing Partner, ASC Legal, said the IBBI move will ensure standardisation of professional practice norms. This is also an acknowledgement of the inconsistent and divergent practices which are in vogue, which needs to be regulated into a given norm. “In times to come a comprehensive code of ethics well bunched and documented would be much desired for,” he said.

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