19 December 2011
Dear Experts, My query has reference to the above subject. My entire query revolves in & around the interpretation of the phrase "any such director" recited many times in the said section. My query is- The said section covers loans given to Directors specified in clause (a) to sub-section (1) to Section 295 of the Companies Act, 1956. It also covers the parties specified in clauses (b), (c), & (d) using the phrase "any such director". I just wish to know whether the said section will be applicable if the loan is not given to the Director but a Private Company in which such Director is a member or director? Example- A Ltd. granted loan of Rs. 1 Crore to B Pvt. Ltd. Whether previous approval of the Central Government is required in this case? It may be noted that no loan is given to any director of both the companies. For the applicability of this section to A Ltd. above, is it necessary that the loan must have been given to any of the Directors of A Ltd. or B Ltd. above & then only the said section will apply to A Ltd. above? Your early reply to this query will be highly appreciated. Thanking You in advance... Regards, Mayur R. Gadhia
30 December 2011
If Same directors are present in Both the companies i.e. public Ltd and Pvt Ltd and Loan is given by Public Company to pvt Company, this section will come into picture. But if loan is provided by Pvt Company to public company then this section will not come into picture.
If Loan is given by a Company (Whether Pvt Ltd or Public Ltd) to its Director then also CG approval is required.
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