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.