Redemption of pref shares

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KSL (Querist)
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18 January 2010
can preference shares be redeemed at a discount? if so, what is the procedure to be followed u/the co.s Act?

Rasesh

Rasesh (Expert)
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18 January 2010 Preference shares can be redeemed at discount. If the discount was not decided as the original terms of issue, then obtain approval for modification/variation of rights with the preference shareholders and then redeem them at a discount.

KSL

KSL (Querist)
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19 January 2010 Thank you for your reply. But whose approval has to be obtained, is it board's approval or shareholders / preference shareholders approval and with what majority resolution can be passed? any forms to be filed with ROC? Pls reply.

Rasesh

Rasesh (Expert)
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19 January 2010 Approval from the respective shareholders has to be obtained for variation of rights of those shareholders. The Board has to pass a resolution to that effect. No forms are to be filed with ROC for variation of rights. Post redemption, Form 5 has to be filed with ROC.

KSL

KSL (Querist)
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19 January 2010 Thank you for your immediate response.

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