Fema

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Rakhi (Querist)
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07 December 2012 Please tell me, may an indian Public Company be invested in shares of overseas Company which is not its JV/WOS? is there any format of Board resolution so please provide?

Ajay Mishra

Ajay Mishra (Expert)
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07 December 2012 Hi

You will pass Board resolution under section 292 of the Companies Act, 1956 or shareholders resolution under section 372A.

Ajay Mishra

Ajay Mishra (Expert)
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07 December 2012 Please make change following resolution accordingly:

Specimen of Board resolution giving authority to invest in the public issue:

The Chairman appraised that the Dena Bank is making public issue of the Equity Shares of Rs. 10 each at a premium of Rs. 17 per share. He appraised that it shall be a good investment if the Company apply for the allotment of 1,00,000 Equity Shares in the Public Issue aggregating Rs.27.00 Lacs only.
The Board appreciated the idea of the Chairman and thereafter the Board passed the following resolution unanimously:
RESOLVED THAT the consent of the Board of directors of the Company be and is hereby accorded to apply for allotment of 1,00,000 Equity Shares of Rs. 10 each of Dena Bank at a premium of Rs. 17 per Share in the public issue for and on behalf of the Company and Shri Puneet Agrawal, the Director of the Company be and is hereby authorised to sign the Share Application Form and to deposit the necessary Share Application Money in terms of the public issue of the Dena Bank.

FURTHER RESOLVED THAT Shri Puneet Agrawal, the Director of the Company be and is hereby authorised to submit the above said resolution with a copy of the Memorandum & Articles of Association of the Company along with the Share Application Form.

Rakhi

Rakhi (Querist)
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07 December 2012 Sir let me clear one thing that an indian entity may invest in shares of foreign Company other than its JV / WOS while ODI guideline lays down provision for JV/WOS.

Ajay Mishra

Ajay Mishra (Expert)
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07 December 2012 You read the following Regulation it may help you. I also suggest you to read latest Notification issued by RBI on this.

Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004

Ajay Mishra

Ajay Mishra (Expert)
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07 December 2012 Notification No. FEMA.184 / 2009-RB

Dated January 20, 2009

Foreign Exchange Management (Transfer or Issue of Any
Foreign Security) ( Amendment) Regulations, 2009

In exercise of the powers conferred by clause (a) of sub-section (3) of Section 6 and sub-section (2) of Section 47 of the Foreign Exchange Management Act,1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (Notification No. FEMA.120/2004-RB dated
July 7, 2004) namely:-

1. Short Title & Commencement:-

(i) These Regulations shall be called the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Second Amendment) Regulations, 2009.

(ii) These Regulations shall be deemed to have come into effect from 19th day of July 2007.

2. Insertion of new regulation 27 :-

In the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (Notification No. FEMA.120/2004-RB dated July 7, 2004, after regulation 26, the following regulation shall be inserted, namely:-

" 27: Opening of Demat Accounts by Clearing Corporations of Stock Exchanges and Clearing Members

A Person resident in India being a Securities and Exchange Board of India approved clearing corporation of stock exchanges and their clearing members may, subject to the guidelines issued by the SEBI from time to time;

i) open and maintain demat accounts with foreign depositories and acquire, hold, pledge and transfer the foreign sovereign securities, offered as collateral by FIIs;

ii) remit the proceeds arising from corporate action, if any, on such foreign sovereign securities; and

iii) liquidate such foreign sovereign securities and repatriate the proceeds thereof to India.”

(i) Foot Note:

The Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 were published in the Official Gazette vide G.S.R.No.757 (E) dated November 19, 2004 and subsequently amended vide
G.S.R. No. 220(E) dated April 7, 2005
G.S.R. No. 337(E) dated May 27, 2005
G.S.R. No. 552(E) dated August 31, 2005
G.S.R. No. 535(E) dated September 6, 2006
G.S.R. No. 13(E) dated January 5, 2008
G.S.R. No. 209(E) dated March 3, 2008

(ii) It is clarified that no person will be adversely affected as a result of retrospective effect being given to these Regulations.

Ajay Mishra

Ajay Mishra (Expert)
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07 December 2012 Hi

Go to the following link, for above mentioned regulation:

https://rbi.org.in/scripts/BS_FemaNotifications.aspx?Id=2126

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