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sanjay srivastava (Querist)
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19 February 2011 Dear Friends PlZ answer of the following query:

Mr. X is the MD of A Ltd and director of B Pvt. Ltd.

B Pvt. Ltd. has given a loan of Rs. 5 Crore to A Ltd and now Mr. X want to pay Rs. 5 Crore to B Pvt. Ltd. directly on Behalf of the A Ltd ( for repayment of Loan) and desireous of getting shares of Rs. 5 Crore from A Ltd. is the transction valid ?

Jayashree S Iyer

Jayashree S Iyer (Expert)
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21 February 2011 According to me, proper course would be X pay Rs. 5 Crores to A Ltd. towards share subscription and A Ltd to repay its debt to B Ltd.

However by way of executing a tripartite Agreement, this type of transaction can be entered into.

Other experts in the forum, please give your comments.