Buying shares of Holding Company

Yes, as per Section 42 of the Companies Act, 1956, subsidiary company cannot be member of holding company execept in respect of shares acquired prior to becoming Subsidiary Company.

Nothing in this section shall apply -

(a) where the subsidiary is concerned as the legal representative of a deceased member of the holding company; or

(b) where the subsidiary is concerned as trustee, unless the holding company or a subsidiarythereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which

includes the lending of money.