Section 112 of the Companies Act, 2063 states the disqualifications of an auditor. As per the Act, none of the certain persons or the firms or companies in which such persons are partners shall be qualified for appointment as auditor and shall, despite appointment as auditor, continue to hold office.
Provision regarding appointing shareholder as auditor as per Section 112 Sub Section c of Companies Act, 2063 states that: persons or the firms or companies who is substantial shareholder of the company or a shareholder holding one percent or more of the paid-up capital of the company or his close relative cannot be appointed as auditor.
In the given case, the percentage of holding of paid up capital is not mentioned. If CA Dongol himself or firm or company in which he is partner or shareholder, or his close relative do not hold one percent or more than one percent of the paid-up capital of MNO Limited only then he is qualified to be appointed as auditor.