Approval u/s. 293

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Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2012 Does a company needs to take Shareholder approval u/s. 293 for transferring of its shareholding in a wholly owned overseas subsidiary company?

Ajay Mishra

Ajay Mishra (Expert)
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07 May 2012 Hi

The provision of section 293 will not apply to transferring of investment whether in India or overseas.

The provision of section 291 deal with this matter which cover general power of the board subject to the MOA and AOA of the company.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2012 thanks, Ajay, for the quick response.

Transfer of 100% shareholding in an wholly owned subsidiary company amounts to selling of an undertaking, hence, my argument is that it needs the approval of shareholders. pl clarify

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Ajay Mishra

Ajay Mishra (Expert)
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07 May 2012 Hi

Its not an undertaking, its an movable and it is stock, so the provision will not apply.

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2012 by virtue of transferring 100% shareholding in a wholly owned subsidiary company, the holding/parent company is transferring the ownership of the wholly owned subsidiary company to the acquirer, doesn't it tantamounts to selling of an undertaking/entiry?

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2012 by virtue of transferring 100% shareholding in a wholly owned subsidiary company, the holding/parent company is transferring the ownership of the wholly owned subsidiary company to the acquirer.... doesn't it tantamount to selling of an undertaking/entity?

Ajay Mishra

Ajay Mishra (Expert)
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07 May 2012 Hi

Please read Ramiaya under section 293 in heading "Sell, lease or otherwise dispose of.......undertaking (Sub section(1)(a)}

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2012 in fact, i did....but not quite understand the logic behind the relaxation for shareholders approval

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Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2012 may i request Ankur Garg/Chandrasekhar Warrier/Sanjay Gupta for their considered opinions on this subject?