16 November 2009
A subsidiary of a Govt Co. is also a Govt Co since as per section 4 of the Act,a company is deemed to be a subsidiary of another company ( holding co )in following conditions- (a) if the holding co holds more than 50 % of nominal value of equity share capital of other co. (b) if the holding co controls or has the power to control the composition of board of directors of the other company (c) if the holding co is a subsidiary of another company , then the subsidiary of the holding co is also a subsidiary of that other co. And as per the Act, a Govt Company means any co in which not less than 51% of paid up share capital is held by Central /State Govt or both. Hence no question of any Govt Co promoting its subsidiary as a Pvt Co.
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