He stacked two discounts. IBBI stacked one suspension.
Written on 06 July 2026, based on public reports at that time.
A valuer was asked to value land for a company going through insolvency. He valued it in two steps.
First, he took the market value and cut it by 40 percent to arrive at fair value. Then he took that already-reduced number and cut it by another 30 percent to arrive at liquidation value.
Two large haircuts, one on top of the other. By the time he was done, the land was valued at less than half of what the market data suggested.
Here is the part that mattered to the regulator. Nowhere in his report did he show the comparable plots he had used, or explain why 40 percent and why 30, rather than 25 or 55. The discounts were not wrong because they were large. Land in insolvency often is worth less than book value. They were wrong because nobody reading the report, the creditors, the resolution professional, the tribunal, could tell where the numbers came from.
He argued the discounting reflected his professional judgment and industry practice, and that nobody had objected to the report at the time. The regulator did not accept it. Judgment is exactly what a valuer is paid for. But judgment without a documented rationale is not judgment on the record, it is just a number. The rules require a valuer to disclose the data relied upon and the reasoning behind every material adjustment, precisely so the judgment call can be checked.
His registration was suspended for three months. He appealed. The suspension was upheld.
This is not really about how much discount is too much. It is that a discount, however defensible in your own head, does not exist professionally until it is written down with the comparable behind it. An undocumented 10 percent discount is riskier to your registration than a documented 40 percent one.
The number that gets you into trouble is rarely the discount. It is the blank space where the reason for it should have been.
Valuers, when you apply a discount, is the comparable data in the report, or only in your head?
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