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Company law related queries

sakshi (CS) (261 Points)

04 July 2012

Dear All

I have following queries and I request you to kindly clarify them:

1.Is it possible to merge a listed Company with an unlisted Public Company? What are the compliances that needs to be adhered to?

2. Does the law provides for the conversion of Redeemable Preference shares into loan?

3. Is it possible to redeem the Preferene shares out of the proceeeds received fromteh sale of Fixed Assets of the Company?I think it is not allowed. The preferne shares can be redeemed only out of the profits of the company and proceeds of fresh issue of shares made for the purpose of redemption.

Please clarify.

Thanks

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7 Replies

Ankit (CA, CS) (3064 Points)
Replied 04 July 2012

Dear Sakshi,

1. Yes listed co can merge with unlisted co. refer to section 391-395 and take over code of SEBI.

2. i dont think this has been provided for.

3. redemption of Pref Shares out of sale of Assets is not allowed. only out of profits of the company.

Regards,

CA Ankit

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Aarush (Delhi) (1566 Points)
Replied 04 July 2012

1. Yes, also make note a reverse merger happens when an unlisted company merges with a listed company

Conduct Board Meetings, proposal of amalgamation, intimation to stock exchange, file form 23 in ROC within 30 days and so on...

3. Not allowed

2. I am not sure, but i think its should be allowable.

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sakshi (CS) (261 Points)
Replied 04 July 2012

Thanks for the reply Gaurav and Ankit.

2. This is for your info, Kerala High Court has allowed PSI Data Syetems Ltd to convert its preference shares.

You can chck out the case law at the following address

https://indiankanoon.org/doc/1745033/

But where should I Look for merger of listed Co with unlisted Co in TAke over code?

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Aarush (Delhi) (1566 Points)
Replied 04 July 2012

HFCL Infotel Ltd. (transferor company) was an unlisted company incorporated ... 2003, it merged with Investment Trust of India Ltd. which is a listed company

Copy of Case Law: -

https://www.sebi.gov.in/satorders/HfclIn1.pdf

sakshi (CS) (261 Points)
Replied 04 July 2012

In my case the listed Company is to be merged with unlisted company. Is there any such example.?

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Aarush (Delhi) (1566 Points)
Replied 04 July 2012

Searching on net.. but not yet found.. do let me know when you get it from other or same source...

Arun Jaiswal (CS) (89 Points)
Replied 05 July 2012

Yes, a listed company can be merged with an unlisted public company. The company in which I have done my management training wasa listed company and it has been merged with a unlisted public company.

Regards

Arun Jaiswal