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CS Professional · Corporate Restructuring, Valuation and Insolvency · Planning and Strategy

Before a demerger, the board of Tirupati Foods Ltd asks its secretary to prepare a data room for the prospective investor in the resulting company. Which step is most consistent with good practice for confidential information shared during due diligence?

Good practice is to execute a non-disclosure agreement first and then allow controlled data-room access, limiting commercially sensitive information to a clean team. This protects confidential and price-sensitive information while still letting the investor complete diligence, and it keeps a record of who accessed what.

  1. AShare all data publicly on the company website
  2. BSign a non-disclosure agreement and give access in a controlled manner, restricting sensitive items to a clean teamCorrect
  3. CGive unrestricted data access first and sign the NDA after the report
  4. DShare only oral summaries and keep no record of access

Explanation

Confidentiality is secured by an NDA before disclosure, with controlled data-room access and restricted viewing of sensitive material by a clean team. Public disclosure or NDA after access loses protection. Keeping no record of access weakens control and audit trail.

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