The Privatisation Commission has been given more clout to control valuation firms, under a new regulation approved by the chief adviser, Fakhruddin Ahmed, officials said Sunday. ‘Under the new regulation, valuation firms will be held responsible for false and fabricated information,’ PC member Nasiruddin Ahmed told the news agency.

The move comes in response to long-standing allegations that valuation firms undervalued the prices of government entities for sale in connivance with buyers, which PC officials said cost the government heavily.

So far the commission has privatised some 74 state-owned enterprises, of which 54 were privatised through outright sales and 20 by offloading shares, according to official data.

‘Some of the enterprises were sold at undervalued prices,’ a PC official, asking not to be named, said.

‘This would be detected if the government conducted an investigation,’ he added.

Previously, 29 chartered accountant firms were enlisted with the PC to appraise the value of government property for sale. Now the number has come down to only nine because of strict regulations.

The Privatisation Regulation 2007, which awaits gazette notification by the law ministry, has also reduced the maximum rebate on the total sale price of an enterprise to 20 per cent from 35 per cent.

Under the new regulation, buyers will not be granted a rebate of more than 20 per cent of the price of an enterprise.

Under the previous rules, a buyer could get a 35 per cent rebate on the total sale price of an enterprise if he paid off the entire amount within 30 days of issuing the letter of intent. An additional rebate of 5 per cent on the total sale price was also granted under the old rules if the buyer made a one-payment purchase in a freely convertible foreign currency.

‘These provisions have now been abolished,’ Nasiruddin Ahmed said. ‘Now, only a 20 per cent rebate of the total sale price will be granted.’

Ahmed hoped that reducing the rebate would save the government money.