preferential allotment

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Manoj Mangal (Querist)
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16 October 2008 A public ltd co. (closely held Co.) has issued 9 % non- cumulative redeemable preference shares during the year 2007-08 to existing equity share holders covered in register to be maintained u/s 301.

whether this issue of preference shares falls under the definition of "preferential allotment".
and what is the reporting requirement under CARO,2003, which is reproduced as unedr:

"whether the company has made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the act.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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16 October 2008 Was this issue made at the same proportion to all shareholders?

Manoj Mangal

Manoj Mangal (Querist)
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16 October 2008 No this issue was not made at the same proportion to all sahreholders

and no special resolution has been passed by the company for this issue.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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16 October 2008 Then, the issue will be termed as preferential.

Manoj Mangal

Manoj Mangal (Querist)
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16 October 2008 whether there is requirement to report this "preferential allotment" as per caro,2003

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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17 October 2008 Yes, of course.

Manoj Mangal

Manoj Mangal (Querist)
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17 October 2008 Sir, Thanks a lot .....