Big accounting firms may not get to value IDBI bank assets
IDBI Bank and the qualification criteria set out have caused a stir among the big four accounting firms that could lose out on the job despite their involvement in some of the biggest banking mergers in recent years.
A request for proposal (RFP) document circulated by the government's department of investment and public asset management (DIPAM) on September 1 states that only valuers registered with the Insolvency and Bankruptcy Board of India (IBBI) are eligible for applying to value IDBI Bank's assets. Further, the registered entities need to have a turnover of above ₹5 crore for three consecutive financial years and also need to have carried out valuations of financial assets above ₹5,000 crore through the registered entities.
The big four accounting firms, Deloitte, EY, PwC and KPMG could get eliminated from the selection process because they could fall short of the eligibility criteria for turnover or because they carried out large valuations exercises from different entities and not their IBBI-registered valuer entities, according to sources.
For instance, Deloitte was the valuer on the $64-billion merger of HDFC and HDFC Bank but its IBBI-registered entity doesn't meet the turnover threshold because it was recently incorporated.
It had carried out the valuation for that merger through its accounting arm Deloitte, Haskins & Sells.
EY was the valuer on the tripartite merger of Oriental Bank of Commerce and United Bank of India with Punjab National Bank, but carried out that valuation exercise through its accounting arm and not through its valuation entity registered with IBBI.
PwC does not meet the turnover threshold, and neither do firms such as Grant Thornton and BDO. KPMG is conflicted because it is already the
