Sec 295 implications
This query is : Resolved
06 September 2013
Is sec 295 applicable for a transaction between two public companies?
Ex- A public company (S co Ltd) which is subsidiary co of Holding Company (H co Ltd) pledged shares held by it as security for a loan taken by H Co Ltd. H co ltd & S co ltd have two common directors.
No board approval was taken for this share pledge.
Is it a violation of sec 295. If yes, what is the remedy?
Pls advise
Ex- A public company (S co Ltd) which is subsidiary co of Holding Company (H co Ltd) pledged shares held by it as security for a loan taken by H Co Ltd. H co ltd & S co ltd have two common directors.
No board approval was taken for this share pledge.
Is it a violation of sec 295. If yes, what is the remedy?
Pls advise
06 September 2013
Hi
As per my understanding of section 42 a subsidiary company con not be a member of its holding company.
So, how Company S Limited can pledge shares of H Limited(holding Co.) shares against loan.
Please confirm, if I am wrong.
As per my understanding of section 42 a subsidiary company con not be a member of its holding company.
So, how Company S Limited can pledge shares of H Limited(holding Co.) shares against loan.
Please confirm, if I am wrong.
06 September 2013
S Ltd is pledging shares held by it of X Co ltd. S ltd does not hold any shares in H Co Ltd
06 September 2013
But you have not talking about X Ltd. Any way.
Yes, they can do so, Subsidiary can pledge their shares of other company against loan taken by holding co.
Yes, they can do so, Subsidiary can pledge their shares of other company against loan taken by holding co.
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