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

In a CIRP, the resolution professional of Mehta Steels Ltd is preparing for a CoC meeting. Which statement about voting by persons attending is correct under section 24?

They may attend but cannot vote. Under section 24, suspended directors or partners and one representative of operational creditors can attend CoC meetings without any voting right, and their absence does not invalidate the proceedings. Voting share is based only on financial debts owed to each creditor.

  1. ASuspended directors who attend may vote in proportion to their shareholding
  2. BThe one representative of operational creditors attending may vote on matters affecting operational creditors
  3. CDirectors and the operational creditors' representative may attend but have no right to voteCorrect
  4. DOperational creditors with dues of ten per cent of the debt get a voting share equal to that percentage

Explanation

Section 24(4) allows directors, partners and one representative of operational creditors to attend but without any right to vote, and their absence does not invalidate proceedings. Voting share is assigned by financial debts owed under section 24(6), so the ten per cent threshold only governs notice and attendance.

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