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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

At a CoC meeting of Sagar Foods Ltd, a former director of the suspended Board attends and objects to a proposal. Another former director and the operational creditors' representative, though given notice, stay absent. Which position is correct under Section 24?

The directors and the operational creditors' representative may attend CoC meetings but have no voting right. If any of them is absent despite notice, the proceedings of the meeting are not invalidated.

  1. AThe attending director may vote, and the meeting is invalid because the others were absent
  2. BThe directors may attend but cannot vote, and the absence of any such director or representative does not invalidate the proceedingsCorrect
  3. CDirectors may vote only on matters concerning their own conduct, and absence invalidates the meeting
  4. DDirectors cannot attend at all, so the objection must be disregarded

Explanation

Section 24(4) allows the directors, partners and one operational creditors' representative to attend without any right to vote. The proviso states that the absence of any of them does not invalidate the proceedings.

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