21.6 INDEPENDENT EXPERT
S114 (2) says the company must retain an independent expert who meets the following requirements to compile a report as required in ss 3, and basically says the qualified person must have the competence and necessary experience to understand the type of arrangement proposed, evaluate the consequences of the arrangement, and assess the effect of the arrangement on the value of the securities and on the rights and interest of a holder of any securities or a creditor of a company and be able to express an opinion, exercise judgment and make decisions impartially.
The person that must be retained must not have any relationship with the company and must have integrity, impartiality of objectivity, cannot have a relationship with the company within the immediately preceding 2 years or be related to a person who had a relationship contemplated above.
The independent expert must prepare a report to the board and cause it to be distributed to all holders of the companies’ securities concerning the proposed arrangement. The report must as a minimum state:
a. All prescribed information relevant to the value of securities effected by the proposed arrangement;
b. Identify every type and class and holder of the company securities affected by the proposed arrangement;
c. Describe the material affects that the proposed arrangement will have on the right and interest of the persons mentioned;
d. Evaluate any material adverse effects of the proposed arrangements against;
(i) The compensation that any of those persons will receive in terms of the arrangements; and
(ii) Any reasonable probable beneficial and significant effect of that arrangement of the business and prospects of the company.
e. State any material interest of any director of the company or trustees for security holders;
f. State the effect of the proposed arrangement on the interest and person contemplated in paragraph e; and
g. Include a copy of s115 and s116. These Sections must be included in the report that gets sent to shareholders.