Share warrent

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Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2012 A newly incorporated public company has issued share warrant but is not accordance with section 114 & 115 of the Company act, Actually the company has violated company Act fully. But Statutory audit was not able to find out that there is violation of the act & he gives the report in the Form 22 and shows that the company has issued Convertible warrant.
Could you clarify , how the statutory auditor resolved this mistake.
ITs URGENT

Ajay Mishra

Ajay Mishra (Expert)
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08 June 2012 Hi

You can issue share warrant under section 81(1A) of the Companies Act, 1956 which is convertible in to equity shares. The auditor is right. Section 114 is dealing with issue of warrants to bearer subject to the approval of CG. It is not talking about general issue of warrants.

So u can take the benefit of section 81(1A) of the Companies Act, 1956.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2012
Actually this is not the case of issue of further share, In this case the convertible warrants has been issued pursuant to the purchase of Land and this clause was mentioned in the sale deed.The land has been purchase at the time of allotment of share . The Authorized capital & subscribed capital is Rs 12,50,000 which does not includes the shares required to issue to the convertible share warrant holder.

Ajay Mishra

Ajay Mishra (Expert)
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08 June 2012 Hi

If it is not in the nature of capital then we are unable to give any answer on this.

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