A public limited company has borrowed money against mortgage of property without shareholder approval and used proceeds to lend to another group company as a clean loan without any security and at lesser than market rates.What is the remedy??
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Diversion of funds by company
Replies (2)
It seems company has contravened provisions of Sec.372A and hence liable to pay penalty as provided in sub-section (9). Complaint in this regard may be filed by any shareholder or ROC or Government as specified in Sec.621 with the court of a Magistrate of First Class or as the case may be, a Presidency Magistrate having jurisdiction to try such offence [Sec.2(11)(b)].
You are seeking advice for the Auditor or Shareholder or the Banker of the Company ?
The remedy for each of them is different.
Thanks
Vinod
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