A listed company A Limited intends to sale its undertaking to its 100% subsidiary company (sub co). For this purpose, as per section 293(1)(a) of the Act, the Board of Directors of A Limited will have to obtain approval of the shareholders through postal ballot. Whether necessary approval can be requested today to sale the undertaking with retrospective effect from 1 Oct 2009?
No. In my view the transaction cannot be with retrospective effect.
Moreover, sale of undertaking will require various agreements between the buying and the selling company. If land is involved, then it will also have to be registered with the land registrar. All these cannot be backdated.