# Section 388 — Expert's Consent & Allotment Provisions
## Why this matters
When a foreign company offers securities in India and its prospectus relies on an expert's statement (e.g., valuer, accountant, engineer), the investor needs assurance that the expert truly stands behind that statement. Section 388 codifies this safeguard.
## The Rule — Section 388(1)
No person shall issue, circulate or distribute in India any prospectus offering subscription in securities of a company incorporated (or to be incorporated) outside India — whether or not it has/will have a place of business in India — if:
### (a) Expert's Consent Defect — any of these:
- Where the prospectus includes a statement purporting to be made by an expert, AND
- The expert has NOT given written consent, OR
- The expert has withdrawn written consent before delivery of the prospectus for registration, OR
- The prospectus does not contain a statement that the expert has given and not withdrawn consent.
### (b) Allotment Provisions Not Effective
If the prospectus does not have the effect of rendering all persons concerned bound by all provisions of Sections 33 and 40 (issue of application forms & allotment), so far as applicable.
## Section 388(2) — Deemed Inclusion
A statement is deemed to be included in a prospectus if it is:
- Contained in any report or memorandum appearing on the face of the prospectus, OR
- Incorporated by reference therein, OR
- Issued therewith.
Practical effect: Companies cannot escape liability by burying expert statements in annexures or supplementary documents.
## Visual Map
```
Foreign Co. Prospectus in India
│
├── Contains Expert Statement?
│ ├── YES → Need: (i) Written consent (ii) Not withdrawn (iii) Disclosure of consent
│ └── NO → Section 388(a) not triggered
│
└── Must trigger binding effect of Sec 33 & Sec 40
```