CGOV.7:5 - Archetypal Grounding

CGOV.7:5.1 - A favourable valuation does not approve a purchase

In a constructed company, Arun’s business offers a warehouse for 120. The supplied rules exclude Arun from deliberation and voting after factual questions. The remaining two directors form the eligible quorum, the board retains the purchase decision, and an independent valuation is required. No other consent is required in this case.

A valuer with the relevant competence and no identified disqualifying relationship is commissioned on a fee that does not depend on approval. With adequate property information, the valuer returns a range of 115–125 conditional on the stated occupancy assumption. The price of 120 lies within that range.

The required review is available under its stated condition. The two eligible directors can now consider the purchase and alternatives under their decision rule. The report neither makes the decision nor establishes that the occupancy assumption is true. A material contrary fact about occupancy must reach their deliberation.

CGOV.7:5.2 - Independence or a further report that adds nothing

Change the proposed valuer’s terms: its entire fee is payable only if the purchase is approved. That dependence is relevant to the required independent opinion. The arrangement must be assessed and corrected under the applicable criteria, for example by changing the engagement or selecting another qualified reviewer. The practitioner’s remedy concerns this dependence, not an automatic distrust of every paid expert.

Alternatively, retain the adequate first opinion and suppose a participant asks for a second one “for assurance.” No rule requires it, and the existing result already answers the valuation question under sufficient conditions. The request alone creates no obligation to duplicate the work. The remaining task is the authorized decision, not a search for another confirming signature.