Appraisers Should Be Criminally Liable

Criminal liability for bogus valuation can be introduced in Russia. ‘The problem of draining resources from a company with the help of appraisers who knowingly make false reports does exist', admitted the representative of the Investigative Committee Georgy Smirnov.

Smirnov believes that civil liability for false appraisal is not good enough and that making it a crime can help law enforcement agencies in the fight against corporate raiders, invaders of property under the guise of a legitimate legal struggle.

There are lots of questions to appraisers both from private companies and the state. In March 2011, for example, inspectors discovered huge overpricing in the contracts for construction of Olympic facilities.

When a company is courting investors, its reports get ‘improved’; the company’s business looks gloomier than it really is in order to drag the company into bankruptcy.

Currently, auditors are criminally liable for knowingly producing inaccurate reports. Why Russian law makes an exception for appraisers is a mystery.