The two ways of relating what a person has said are 1)direct and 2)indirect (reported).
In the direct speech, the exact words of the original speaker are repeated.
In the indirect speech (reported speech), the exact meaning of what the speaker told is expressed but not necessarily in the speaker’s exact words.
Option C is correct as the given sentence is in the present perfect tense and the appropriate introductory verb 'said ' is used.
Options A,B, and D are wrong as 'hasn't', 'didn't' and 'these days' cannot be used respectively.
The correct answer is C)He said that he hadn't seen Diane recently.