The Securities and Exchange Commission of Pakistan (SECP) has decided to allow valuers listed on the panel of Pakistan Banks Association to work as registered valuers to evaluate any property, stocks, shares, debentures, securities or goodwill, or any other assets or net worth of a company or its liabilities.
The SECP has issued a draft amendment to the Companies (Further Issue of Shares) Regulations, 2020 through a notification issued here on Monday.
These regulations shall apply to the companies issuing further capital by way of right shares; other than right shares; bonus shares; employee stock option schemes and shares with different rights including preference shares.
According to the notification, where valuation is required in respect of any property, stocks, shares, debentures, securities or goodwill, or any other assets or net worth of a company or its liabilities, the following persons shall be eligible to conduct the requisite valuation:
- Consultant registered with Pakistan Engineering Council;
- Valuers listed on the panel of the Pakistan Banks Association
- Firms of practicing chartered accountants having satisfactory Quality Control Review awarded by the Institute of Chartered Accountants of Pakistan.
The valuers eligible with relevant entities or agencies shall also be deemed to be registered with the Commission and shall be entitled to conduct a valuation, subject to fulfillment of the requirements of regulation 8A and 8B. All such valuers shall continue to be regulated, administered, and monitored by the entities in which they are originally registered, and shall comply with all relevant rules, regulations, instructions, etc. of such entities in addition to requirements of the Companies Act.
As per SECP, the following valuers who are independent shall be eligible to conduct valuation: The valuation in respect of plant and machinery would be conducted by valuer registered with the Pakistan Engineering Council as consultant and whose name appears, as a valuer, on the panel of Pakistan Banks Association.
The valuation in respect of immovable property i.e. land, building, etc., would be done by a valuer whose name appears, as a valuer, on the panel of Pakistan Banks Association;
The valuation in respect of services, intangible assets, and net worth of an undertaking, would be conducted by a valuer who is a practicing chartered accountant having satisfactory Quality Control Review awarded by the Institute of Chartered Accountants of Pakistan.
The valuation in respect of natural resources and exploration thereof, by a valuer on the panel of Pakistan Banks Association having an experience of at least five years in the relevant field; and in respect of the value of all other assets would be done by a valuer on the panel of Pakistan Banks Association having experience as a valuer of at least five years in the relevant field.
Explanation: For the purpose of this sub-regulation, the word “independent” shall mean the valuers that are not associated companies or associated undertakings of the issuing company.
The SECP stated that the valuation shall not be older than six months, or such other time period as may be notified by the Commission, from the date of submission to the registrar pursuant to section 70 of the Act in case of a private company and from the date of submission of the application to the Commission in case of a public company seeking approval of the Commission.
The relevant entity/agency, on its own motion or on the reference by the Commission, may initiate necessary action against any valuer registered with it for any misconduct or failure to perform professional duties in accordance with its rules and regulations, and may cancel the registration of such a valuer. Upon cancellation, such valuer shall not be eligible to conduct any valuation for the purposes of the Act.”