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

Meera Auto Ltd engages a valuer for valuing its shares under the Companies Act, 2013. The valuer had held a direct interest in a subsidiary of Meera Auto two years before the appointment. Which statement is correct under section 247?

The valuer may not undertake the valuation. Section 247(2)(d) prohibits valuing assets in which he has a direct or indirect interest during three years prior to appointment or three years after the valuation, and two years falls within that period.

  1. AThe valuer may proceed, since the interest ended before appointment
  2. BThe valuer may not value assets in which he had a direct or indirect interest during three years prior to appointmentCorrect
  3. CThe valuer is barred only if the interest continues at the time of valuation
  4. DThe valuer is barred only for one year after the valuation

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 a period of three years prior to appointment or three years after the valuation. Two years before appointment falls inside the three-year window, so option one fails.

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