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Section 372 A

CA,CS Robin Sojrani (CA & CS ) (148 Points)

26 November 2007

what are the provisions of sec.372 A . i was not able to understand from plain reading form Bare Act . is there any other source (book) from where i can get the rovisions i simple langauge

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5 Replies

Narendra (Employment) (154 Points)
Replied 26 November 2007

Hi Robin, U can refer ICAI Final Corporate law material, or other corporate law books prescribed by various authors for CA final.... eg:Munish Bhandari or Jayaraman sirs notes for better clarity over the provisions............. All d best.................

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Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 26 November 2007

Inter-corporate investment in shares 13.12 Restrictions are imposed on public companies limited by shares in respect of inter-corporate investment in shares in section 372A of the Act. No company shall acquire by subscripttion, purchase or otherwise securities including shares of any other body corporate exceeding 60% of its paid-up capital and free reserves or 100% of its free reserves, whichever is more, otherwise than with the unanimous resolution consented to by all the directors present at a Board meeting, with the prior approval of the public financial institutions where any term loan is subsisting and there is no default in repayment of loan instalments or payment of related interest. Any investment by a company in any other body corporate beyond the said limit requires previous authorization by a special resolution. In the event that a company has defaulted in the repayment of public deposits or payment of related interest under section 58A, no investment in the shares of any other body corporate is permitted so long as such default is subsisting.

CA,CS Robin Sojrani (CA & CS ) (148 Points)
Replied 26 November 2007

plz clarify whtare the provisions abt investing in foreign Subsidiaries. 1) when investing for the first time while incorporating the co. 2) later on ivestements, once it is incoparated

Vidya (ca final) (56 Points)
Replied 21 July 2009

hi ..

I would like to know if Sec 370A is applicable to government companies or not? This doubt arised because S.370 was not applicable to Gov Co.

Ajay Mishra (Company Secretary) (74337 Points)
Replied 21 July 2009

Dear Ms. Vidya

Subsection (6) was inserted in Section 370 with effect from 31-10-1998 by the Companies (Amendment) Act, 1999 to make the provisions of this section inoperative from that date. But, the basic provisions of section 370 and 372 have been clubbed together and re-enacted in section 372A.

Section 370A deal with section 369 and 370 which is not in operation. I think now these section doesn’t matter, whether it applicable on Government company or not.

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Regards