Issue of Shares in Private Limited company

Anand (Practicing CA) (190 Points)

08 October 2010  

Can a private limited company issue shares to one of its directors for providing collateral security for obtaining project finance from financial institution as only one of the director has provided all the security and wants  additional shares to be allotted against such collateral security?

If the yes what should be the basis of valuation of security against which shares to be issued?

Will the shares be issued at face value only ?