Buy back sec 70(1)(a) and (b) prohibiton interpretation help

Dear Learned CCI Members,

Can any body please interpret Sec 70(1)(a) and clause (b) which mentions about prohibiton of buyback. While going through section 70, I got confused in clause (a) which says no company shall directly or indirectly purchase its own shares or other specified securities through any subsidiary company including its own subsidiary companies. Does this mean a holding company shall not buy back its securites using the proceeds of the securities premimum account, free reserves of its own subsidiary and its step down subsidiaries?

Please clarify clause (b) also. It would be much appreciated if some body can interpret using some examples.

 Thanks in advance.

Regards,

Arjun Rajagopal

Replies (4)

The Section restricts Buy Back through subsidiary or investment company , I guess the Proceeds of subsidiaries shall not be used.

The Section restricts Buy Back through subsidiary or investment company , I guess the Proceeds of subsidiaries shall not be used.

Thanks Mandar for your reply. Waiting for other learned members view. 

 

Regards,

Arjun Rajagopal

yes, No Company shall directly or indirectly purchase its own shares through any subsidiary company including its own subsidiaries, investment or group of investment company. The law has mentioned any Which also includes step subsidiaries companies also

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