right issue

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This query is : Resolved

POONAM SHARMA (Querist)

28 April 2009 A Ltd. is having 40% shares in B Ltd.
Now B Ltd wants to enhance its capital by right issue.

but the co. don want to issue more shares to A Ltd.

and finally co. issue right shares but not to A Ltd

is it valid

plz give reason

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)

29 April 2009 No, the stance taken by B Ltd. is not valid.As Company A Ltd. holds equity shares in B Ltd, A ltd. has the right to take part in the further offering made by B ltd. in the form of Rights Issue, in this case.
B Ltd. cannot come up with a Rights Issue if it doesnt want to offer such shares to A Ltd.

POONAM SHARMA

POONAM SHARMA (Querist)

30 April 2009 THEN what about special resolution ??????//
in bod meeting

Ankur Garg

Ankur Garg (Expert)

02 May 2009 This allotment of shares by B ltd is not valid at all. It is clear cut violation of section-81(1).

If B Ltd don't want to issue further shares to A Ltd. then the only way out is preferential issue u/s 81 (1A) by passing Special Resolution.

Regards

POONAM SHARMA

POONAM SHARMA (Querist)

03 May 2009 THANK U SIR

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