query regarding sec 295 (Loans to Directors)

Hi friends.. I have the following query.. pls advise

There is one Listed Company "A" Ltd and one closely held Public Company "B" Ltd.
Now A ltd has taken a Loan from bank and B ltd on behalf of A ltd given a Gurantee to Bank for the said loan.
One of the Director in A and B ltd is common. He act as chairman in B ltd and is an independent Director of A ltd.

Also the Holding of Director in Both the company is between 1 - 2 %

 Now my Question is whether Sec 295(Loans to Directors) is attracted or not

 

Thanks in Advance

Amisha

Replies (4)

Hello Amisha,


As per my understanding in your case section 295 loan to director is not applicable. The above situation is governed by section 372A as this is an Inter corporate Guarantee by the nature of transaction itself.


Further in the above mentioned case section 299, 300 and 301 are also applicable as the director is interested in the transaction.


Views of other learned memebers solicited.


Best Regards

Agree with Mr. Ankur Garg, Section 295 will not be applicable, only Section 372A, 299, 300 & 301 is applicable

yes , agree with Ankur sir and Uday .

372A provides for the limit. do chk tat.

Regards

Neeta

Thanks all.. special thanks to Mr. Ankur and Mr. Uday.

Regards,

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