CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency
After registration, the Board finds that Malwa Insolvency Agency obtained its certificate by furnishing a false statement about its governance structure. Which course is consistent with the Code?
The Board may suspend or cancel the certificate because registration was obtained by a false statement, but only after giving the agency a reasonable hearing, and the order must be passed by whole-time members of the Board, not any other member.
- AThe Board may suspend or cancel the certificate by order, after giving the agency a reasonable opportunity of being heard, and such order cannot be passed by a member other than a whole-time memberCorrect
- BThe Board may cancel the certificate immediately without hearing because fraud is involved
- CThe Board may only issue a warning, as cancellation is possible only for contravening the Code
- DThe certificate can be cancelled by any member of the Board, including a part-time member, after a hearing
Explanation
Obtaining registration by false statement or misrepresentation is a listed ground for suspension or cancellation. The order requires a reasonable opportunity of being heard and may be passed only by whole-time members of the Board. Options B and D violate these safeguards.
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