14 March 2022
Hello, Suppose there is a Society (registered under SRA 1860 and FCRA 2010). The Society is registered to develop and promote sporting activities. Some of the members of the society are NRIs (holding Indian passport) and NRIs (holding foreign passport and Indian OCI card). They will remit foreign currencies (complying with FCRA 2010).
My query is, can a part of these foreign proceeds be utilized to acquire equity/preference shares of Private Ltd companies registered in India for sporting purposes ?
15 March 2022
Thank you sir, can I contact you directly for further query? my email id is samikdhar@gmail.com If you send me a mail, I want to ask you a follow up query. Section 7(b) of the FCR Act allows transfer with prior approval of the C.Govt. "Provided that such person may transfer, with the prior approval of the Central Government, a part of such foreign contribution to any other person who has not been granted a certificate or obtained permission under this Act in accordance with the rules made by the Central Government."
Also, section 8(a) prohibits usage of fund for speculative purposes, but it does not explicitly prohibit acquiring equity in a pvt ltd company for non-speculative purposes. (as a minority shareholder) So that is my doubt.
15 March 2022
Ask any query bere itself it will be answered. FCRA funds can't be utilised for equity investment in private limited company. If you still wish take approval of central government.
CAclubindia
