Issue of shares by subsidiary at par

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Practicing
27 Points Posted on 07 January 2011

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.

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On 07 January 2011 at 15:47 Report
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Company Secretary
565 Points Posted on 07 January 2011

 

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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On 07 January 2011 at 17:00

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