Inter corporate guarantee

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2012 A Public Listed Company is engaged in producing sugar. Yes Bank Ltd. ( a Listed Private Sector Bank) will advance loans to the farmers provided the Public Company provides Guarantee to the Bank. Please advise whether Sec. 372A is attracted and needs to be complied with. Thanks. Sreedharan

Ajay Mishra

Ajay Mishra (Expert)
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12 July 2012 Hi

Section 372A says when a public company give any loan, guarantee or security to/in connection with any body corporate.

In your case bank is given loan to former(not a body corporate) and Sugar company give guarantee, so as per my understanding section 372A will not apply.

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