A public limited company has borrowed money against mortgage of property without shareholder approval and used proceeds to lend to another group company as a clean loan without any security and at lesser than market rates.What is the remedy??
2 Replies
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 02 August 2009
It seems company has contravened provisions of Sec.372A and hence liable to pay penalty as provided in sub-section (9). Complaint in this regard may be filed by any shareholder or ROC or Government as specified in Sec.621 with the court of a Magistrate of First Class or as the case may be, a Presidency Magistrate having jurisdiction to try such offence [Sec.2(11)(b)].
Vinod Kashyap
(XBRL Training)
(451 Points)
Replied 02 August 2009
You are seeking advice for the Auditor or Shareholder or the Banker of the Company ?
The remedy for each of them is different.
Thanks
Vinod
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