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buyback of shares

sbhaktha (bcom + lawstudent @ present) (109 Points)

30 March 2019

A Ltd. had entered into an Agreement with B Ltd where by B Ltd. had subscribed 500000 worth shares and after five years A Ltd. was to refund the amount at 18% IRR. now A Ltd has repaid the amount and B Ltd. has returned the share certificate. whether this amounts to buy back?

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6 Replies

Radhey Shyam Jha (Student) (1616 Points)
Replied 30 March 2019

Not at all

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sbhaktha (bcom + lawstudent @ present) (109 Points)
Replied 30 March 2019

why not.. please give me reasons

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Priya Kashyap (Student) (7053 Points)
Replied 31 March 2019

such an agreement can arise in case debt owned by A Ltd
such cannot be treated as buy back of shares

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sbhaktha (bcom + lawstudent @ present) (109 Points)
Replied 31 March 2019

there is nothing relating to owning of debt. this A LTD and B LTD. had signed the agreement. now they have repaid as well. hence, I am of the view that was a process of buy back which wasn't complied by the company

Priya Kashyap (Student) (7053 Points)
Replied 31 March 2019

agreement yu hi thodi bnte haii

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sbhaktha (bcom + lawstudent @ present) (109 Points)
Replied 31 March 2019

agreement me sirf itna he ki B LTD will infuse so and so amount which has to be repaid within so many years with periodic payment of interest. and this lending of amount has taken in the form of equity. I feel it's a kind of loan but coloured with equity capital .

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