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CS Professional · Strategic Management and Corporate Finance · Raising of Funds from Equity and Procedural Aspects - Public Funding

Kaveri Pharma Ltd proposes to issue further shares to a selected group of investors who are not existing shareholders or employees, for cash. Which condition does section 62(1)(c) require?

Such a preferential issue to any persons needs authorisation by a special resolution, and the share price must be fixed on the valuation report of a registered valuer, subject to the applicable Chapter III provisions and prescribed conditions.

  1. AOnly an ordinary resolution and a valuation by the company's auditor
  2. BOnly Board approval, as the issue is for cash
  3. CA special resolution, and the price must be determined by the valuation report of a registered valuer, subject to Chapter III compliance and prescribed conditionsCorrect
  4. DConsent of every existing shareholder in writing

Explanation

Section 62(1)(c) allows issue to any persons if authorised by a special resolution, for cash or other consideration, where the price is determined by the valuation report of a registered valuer, subject to Chapter III and prescribed conditions. An ordinary resolution or Board approval alone is insufficient, and unanimous consent is not required.

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