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CS Professional · Strategic Management and Corporate Finance · Role of Intermediaries in Fund Raising

Which of the following is a correct statement about the due diligence certificate in a public issue handled by a lead manager?

The lead manager submits a due diligence certificate to SEBI along with the draft offer document, confirming that the disclosures are true, fair and adequate for investors. It is filed before the issue opens and cannot be substituted by the auditor's report.

  1. AThe lead manager submits a due diligence certificate to SEBI confirming that disclosures in the offer document are true, fair and adequateCorrect
  2. BThe issuer's auditor submits it in place of the lead manager
  3. CIt is required only for rights issues, not public issues
  4. DIt is submitted only after the issue has closed

Explanation

The lead manager files a due diligence certificate with SEBI along with the draft offer document, confirming that it has examined the issuer's disclosures and that they are true, fair and adequate to enable investors to make an informed decision. It is not replaced by the auditor, and it is filed before, not after, the issue.

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