Requirements As To Independent Valuation
1009. Application of valuation requirements(a) section 558 (allotment of shares of public company in consideration of non-cash asset),(b) section 564 (transfer of non-cash asset to public company).
1010. Valuation by qualified independent person(1) The valuation and report must be made by a person (“the valuer”) who–(a) is eligible for appointment as an auditor (see Part 37), and(b) meets the independence requirement in section 1011.(2) However, where it appears to the valuer to be reasonable for the valuation of the consideration, or part of it, to be made by (or for him to accept a valuation made by) another person who–(a) appears to him to have the requisite knowledge and experience to value the consideration or that part of it, and(b) is not an officer or employee of–(i) the company, or(ii) any other body corporate that is that company’s subsidiary or holding company or a subsidiary of that company’s holding company,or a partner of or employed by any such officer or employee,he may arrange for or accept such a valuation, together with a report which will enable him to make his own report under this section.(3) The references in subsection (2)(b) to an officer or employee do not include an auditor.(4) Where the consideration or part of it is valued by a person other than the valuer himself, the latter’s report must state that fact and shall also–(a) state the former’s name and what knowledge and experience he has to carry out the valuation, and(b) describe so much of the consideration as was valued by the other person, and the method used to value it, and specify the date of that valuation.
1011. The independence requirement(1) A person meets the independence requirement for the purposes of section 1010 only if–(a) he is not–(i) an officer or employee of the company, or(ii) a partner or employee of such a person, or a partnership of which such a person is a partner,(b) he is not–(i) an officer or employee of an associated undertaking of the company, or(ii) a partner or employee of such a person, or a partnership of which such a person is a partner, and(c) there does not exist between–(i) the person or an associate of his, and(ii) the company or an associated undertaking of the company,a connection of any such description as may be specified by rules made by the Board.(2) An auditor of the company is not regarded as an officer or employee of the company for this purpose.(3) In this section–“associated undertaking” means–(a) a parent undertaking or subsidiary undertaking of the company, or(b) a subsidiary undertaking of a parent undertaking of the company, and“associate” has the meaning given by section 1012.
1012. Meaning of “associate”(1) This section defines “associate” for the purposes of section 1011 (valuation: independence requirement).(2) In relation to an individual, “associate” means–(a) that individual’s spouse or minor child or step-child,(b) any body corporate of which that individual is a director, and(c) any employee or partner of that individual.(3) In relation to a body corporate, “associate” means–(a) any body corporate of which that body is a director,(b) any body corporate in the same group as that body, and(c) any employee or partner of that body or of any body corporate in the same group.(4) In relation to a partnership that is a legal person under the law by which it is governed, “associate” means–(a) any body corporate of which that partnership is a director,(b) any employee of or partner in that partnership, and(c) any person who is an associate of a partner in that partnership.(5) In relation to a partnership that is not a legal person under the law by which it is governed, “associate” means any person who is an associate of any of the partners.
1013. Valuer entitled to full disclosure(1) A person carrying out a valuation or making a report with respect to any consideration proposed to be accepted or given by a company, is entitled to require from the officers of the company such information and explanation as he thinks necessary to enable him to–(a) carry out the valuation or make the report, and(2) A person who knowingly or recklessly makes a statement to which this subsection applies that is misleading, false or deceptive in a material particular commits a contravention of these Regulations.(3) Subsection (2) applies to a statement–(a) made (whether orally or in writing) to a person carrying out a valuation or making a report, and(b) conveying or purporting to convey any information or explanation which that person requires, or is entitled to require, under subsection (1).(4) A person who commits the contravention referred to in subsection (2) is liable to a level 2 fine.