16 February 2011
Can a holding company create charge on the property of its wholly owned subsidiary to secure its (Holding company's) Non-convertible debentures?
16 February 2011
In my opinion u can create charge on the property of wholly owned subsidiary for securing Holding Company's Non - Convertible Debentures.
I suppose when a Company becomes a Wholly owned subsidiary of some other Company, the managment of the Company goes in the hands of the latter Company. The managment can conduct deal with the assets of the Company, conduct the affairs in the manner they consider appropriate and in the interest of the Company.Due to acquisition of 100% shareholding of the other Company, all the assets, propoerties of the other Company will be the propoerty of the Holding Company and charge can be created on them forsecuring the loans availed by the Holding Company.
Mam can u substantiate ur opinion with some explanation?
Thanks. I came across the Annual Report of Spanco Ltd. for the year 2009-10. In the section Notes to Accounts it has been mentioned that the holding company created security on the assets of its subsidiary.
For your ready reference providing herewith the link:
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