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Saturday, May 9, 2009

Valuers laud new guidelines

PROPERTY valuers and industry players are generally positive about the amendments on the asset valuation guidelines by the Securities Commission (SC) as announced yesterday.

However, there are concerns over the minimum requirement on the number of years of post-registration experience set on valuers that may halt the growth of the asset valuation industry.

Valuation firms making submissions for asset valuations for public-listed companies must now have at least one equity owner at head office with a minimum of seven years’ post-registration experience.

The firms must also not be issued with more than two sanctions by the SC and Bursa Malaysia in the past three years.

Association of Valuers and Property Consultants in Private Practice Malaysia president James Wong says: “While we appreciate SC’s requirements for higher standards of valuation submission, we want the commission to consider whether the amendments made will result in discrimination of the smaller firms, emerging firms and sole-proprietorships.

“We request that the minimum post-registration experience for equity owner be reduced from seven years to five years.

“We also recommend that firms which have no prior experience and track record but have external valuation experts to assist be given the opportunity to seek approval from SC to submit the valuation for the commission.”

DTZ Nawawi Tie Leung Property Consultants senior director Adzman Shah Mohd Ariffin says the move is good to ensure certain level of competence within the industry players but this will also restrict young valuers from being able to carry out asset valuations for the SC.

“With the new guidelines, it will not be easy for new and smaller firms to penetrate the market in asset valuation,” he tells StarBizweek. “This might have an impact on the growth and prospects of the profession.”

Ernest Cheong PTL Chartered Surveyors principal Dr Ernest Cheong says the amendments made is a good move to filter those who are under qualified and inexperienced valuers from undertaking assets valuation worth millions of ringgit for the SC.

“It is a good move but I think it is not stringent enough,” he says.

He opines that any valuer found to misbehave or has been issued a warning letter by the SC should be barred from submitting valuation to the commission for a three-year period after receiving its first sanction.

“If they repeat the same offence, the punishment should be doubled to six years instead. They should be barred for life should they be doing it for the third time,” says Cheong.

He says valuers undertaking asset valuation for the SC, which usually involve asset of public-listed companies, should exercise the utmost professionalism and integrity in view of public interest.

“We fully support the amendments made as this would help prevent property valuers from colluding with public-listed companies’ directors from intentionally over-valuing property assets.”

Under the new guidelines, property valuers carrying out valuations must possess minimum requirement of five years post-registration experience compared with three years previously.

Valuation firms are also required to have sufficient internal controls and procedures, including having an established peer review process and head office that oversees all its branches.

CH Williams Talhar & Wong Sdn Bhd managing director Goh Tian Sui says the stringent requirements imposed by the SC will tighten up the quality of reporting work on asset valuation.

“This is a process we have to go through to have a higher standard of reporting in Malaysia,” he says.

By The Star (by Shannen Wong)

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