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CS Professional · Corporate Restructuring, Valuation and Insolvency · Process of M&A Transactions

Valuation of Anand Engineering Ltd's undertaking was done by a registered valuer. After the valuer's conviction under Section 247(3) for a misleading report, a minority shareholder suffered loss in the deal. Which statement is correct under Section 247(4)?

A convicted valuer must refund the remuneration received to the company and also pay damages to the company or any other person for loss caused by incorrect or misleading statements in the report, under Section 247(4). Damages are not limited to the company.

  1. AThe valuer must only refund remuneration; damages need a separate Act
  2. BThe valuer must refund remuneration to the company and pay damages to the company or any other person for loss from incorrect or misleading statementsCorrect
  3. CThe valuer must pay damages only to the company, not to any other person
  4. DThe Audit Committee that appointed him bears the refund liability

Explanation

Section 247(4) makes a convicted valuer liable both to refund the remuneration to the company and to pay damages to the company or any other person for loss arising from incorrect or misleading statements. Limiting damages to the company ignores the words 'any other person'.

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