There are two Public Limited Companies viz. Company A and Company B. Mr.X is a Director of both these Companies and holding 50% of shareholding in Company B.
To make Company B, a subsidiary of Company A, Company A want to purchase the majority of shares held by Common Director in Company B at the price arrived by Statutory Auditor.
The above transaction is within the limit prescribed by Sec.372A of Companies Act and Company A passed unanimous resolution at its Board Meeting.
Whether approval under Sec.297 or any other section of Companies Act is required.
13 August 2009
Only Section 292(1)(d),299 & 300 will affect: For 292(1)(d)- such investment should be within the limits. Sec 299 - Director must have placed before director his holding as it is above 2 % Sec 300 - He should not participate in the Resolution & discussion being insterested.
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