CA Intermediate · Corporate and Other Laws · Prospectus and Allotment of Securities
Meridian Pharma Ltd issued a prospectus containing the statement that its new plant had been approved by a named government expert, Dr. Iyer, whose written consent to the statement had been obtained and filed. Before delivery of the prospectus for registration, Dr. Iyer withdrew his consent in writing. The company still filed it with the statement. Which is the correct position?
The prospectus is not valid. An expert's statement can be included only if the expert has given written consent and has not withdrawn it before the copy is delivered to the Registrar. Dr. Iyer withdrew before delivery, so the company cannot rely on his earlier consent.
- ADr. Iyer's consent once given cannot be withdrawn
- BThe prospectus is invalid only if Dr. Iyer is a director
- CA prospectus including an expert's statement is not valid unless the expert has given written consent and has not withdrawn it before delivery of the copy for registrationCorrect
- DThe withdrawal is effective only if made after allotment
Explanation
The Act requires that the expert has given written consent to the issue of the prospectus with his statement and has not withdrawn it before delivery of the copy to the Registrar. Here the withdrawal came before delivery, so the prospectus is not valid. Option A is wrong because withdrawal is permitted before delivery.
Did you get it right without looking?
One question tells you little. A timed set on Prospectus and Allotment of Securities shows your real accuracy, how long you take and where you lose marks.
More Prospectus and Allotment of Securities questions
- Zenith Agro Ltd, an unlisted public company, issued a prospectus on 1 June to raise capital. The prospectus contained a statement that the c…
- Sunrise Agro Foods Ltd, an unlisted public company, plans to invite the public to subscribe for its equity shares through a prospectus. Befo…
- Meridian Textiles Ltd issued a prospectus that stated its plant had a capacity of 50,000 metres a day, though the directors knew actual capa…
- Kaveri Foods Ltd, a public company, made a public offer of shares. The issue closed and the company received applications. Under the Compani…
- Veda Textiles Ltd, an unlisted public company, issued a prospectus inviting the public to subscribe for its equity shares. One of the direct…
- Kaveri Textiles Ltd, an unlisted public company, issued a prospectus inviting subscription to its shares. The minimum subscription stated in…