IBBI hands 3-month ban to insolvency professional for appointing unregistered valuer
Jaipur-based insolvency professional Rajneesh Singhvi lands in trouble for hiring an unregistered valuer. The Insolvency and Bankruptcy Board of India (IBBI) has barred Singhvi from taking any new assignment under the insolvency and bankruptcy code (IBC) after it found him for violation of the code.
The IBBI took the action against the insolvency professional after the disciplinary committee of the board found him of appointing an unregistered valuer in the insolvency process of corporate debtor Arjun Ispat India Pvt Ltd in contravention of the Insolvency and Bankruptcy Code (IBC).
The board on 21 May 2020 had issued a show cause notice to Rajneesh Singhvi based on material available on record in respect of his role as an interim resolution professional (IRP) and/or resolution professional (RP) in appointing unregistered valuer Abhishek Ahuja in the corporate insolvency resolution process (CIRP) of Arjun Ispat India Private Limited. The CIRP started on 2 January 2019.
The Show cause notice alleged contraventions of section 208(2) (a) & (e) of the Insolvency and Bankruptcy Code, 2016 (Code), regulation 7(2) (a), (h) and (i) of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) and the Code of Conduct under regulation 7(2), regulation 27 the IBBI Regulations 2016 (CIRP Regulations) and IBBI Circular dated 17 October 2018.
Singhvi’s defence
In his submission to the board, the insolvency professional, who was then engaged as liquidator in the case, said that in compliance with the mandatory condition to appoint registered valuers, he sought quotes from many valuers. However, most of them were not registered valuers and the quotes were very high. Thereafter, he engaged RR & Co but its appointment was revoked on 25 February 2019 for not having registration with the Board. Similarly, RK & Associates were appointed for valuation but they had to be removed immediately since they could not supply documents of registration with the Board.
Singhvi further said in his response to the show cause notice that he got reference of Abhishek Ahuja from a co-professional and appointed him when Ahuja provided him relevant mark sheet and certificate of passing of the valuers examination and quoted the fee of Rs 15,000 and represented that he was registered with the Board. The valuer also promised Singhvi to provide the certificate of registration at the earliest.
However, when the valuer did produce his registration certificate issued on 31 July 2019, Rajneesh Singhvi that the valuer was not registered with the Board at the time of his appointment.
Singhvi further submitted that upon his realization that the valuer did not have the registration on the day of his appointment the amount of valuer’s fee was refunded by him and, therefore, no loss occurred to the corporate debtor.
The disciplinary committee of the IBBI, nonetheless, found the resolution professional breaching the IBC rules and handed over the three-month ban. However, during this three month the Singhvi can carry on with completing his existing assignments and duties.
