Issuing shares to director at very low price

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 March 2012 An unlisted public ltd co wants to issue shares to its directors at a very low rate possible at par value or less than that correspondingly it is going to issue to shares to other companies at 50times premium is the two things possible at the same time.
kindly reply the same with the specifics of section which allows the same or does not allow the same.

Ajay Mishra

Ajay Mishra (Expert)
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02 March 2012
Section 79 of the Companies Act permit the company to issue shares at discount.

Ankur Garg

Ankur Garg (Expert)
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02 March 2012 Dear Mr. Ajay,

It is about different valuation and not about issue of shares at discount.

However companies are doing this kind of discrimination but as per my opinion this kind of different valuation is not possible and may be objected by ROC.

Regards

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Ajay Mishra

Ajay Mishra (Expert)
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02 March 2012 Thanks Dear for clarification.