Skip to content

CS Professional · Compliance Management, Audit and Due Diligence · Due Diligence

During a due diligence exercise for Bharat Agro Ltd, registered valuer Mr. Sharma discovers that he held shares in the target company two years before his appointment as valuer. He proposes to proceed because he no longer holds the shares. Which statement is correct under section 247 of the Companies Act, 2013?

He cannot undertake the valuation. Section 247(2)(d) prohibits a valuer from valuing assets in which he had a direct or indirect interest during the three years before his appointment, and his shareholding two years earlier falls within that period.

  1. AHe may proceed, as only a current interest bars him
  2. BHe may proceed if the Board consents in writing
  3. CHe cannot undertake the valuation, as a direct or indirect interest within three years prior to appointment bars himCorrect
  4. DHe cannot act only if the interest was held in the year of appointment

Explanation

Section 247(2)(d) bars a valuer from valuing assets in which he has a direct or indirect interest, or becomes so interested, during three years before his appointment or three years after the valuation. His interest two years earlier falls within the window. Option A ignores the look-back period.

Did you get it right without looking?

One question tells you little. A timed set on Due Diligence shows your real accuracy, how long you take and where you lose marks.

Practise Due DiligenceFree diagnostic mock

More Due Diligence questions