Issue of shares by subsidiary at par

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Subsidiary is acquired by the holding company by paying premium.

Now subsidiary wants further issue shares at par which could result into dimunition in the value of investments hold by holding company

Kindly advice and provide any case law on the same.

Replies (1)

 

Hello!


As per my views whatever happened in a subsidiary co. happens with the consent of holding co. either by way of hold in management or by way of voting powers.

So if the subsidiary co want to issue capital then that further issue can be alloted to that holding co. which would nt effect the holding subsidiary relationship........and in case when holding co is nt ready to accept the new issued capital then the co doesnt have other way out there would be dimunition in holding co. %age holding.

Any others view..........


Regards
Nidhi

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