Aswathi (accountant) (65 Points)
23 September 2020Hi Team,
My Company is an associate of a Main Company in China. The 2 major shareholders are Hong Kong companies holding around 97 % of the shares.
Remaining 3% is being held by an Indian Director. We would want to transfer the 3% back to HK company.
For Share Transfer, is it mandatory to go through a government approval route??
What is the next best alterative as the director do not wish to hold these shares?
Looking for answers
Aswathi
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 September 2020
This must be some kind of overseas company following IFRS or IndAS standards. The company can follow share based payments standard when your transferring it back to the company either ways if the director resigned his job or using the exercise option to receive cash by the end of grant period.
No need for any government approval.
If an employee doesn’t like to hold them, he can sell them to someone else if the vesting conditions permit an employee or else, don’t exercise them and they will be forfeited by the company.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 September 2020
If your writing about investment interest then just sell it back, sell it to someone else for consideration. No need for any government approval. Are there any company laws which prevents disposing of investments in companies? I don’t think so because this is a free market. If the director does not want to hold them, sell it in the secondary market as well.
Aswathi
(accountant)
(65 Points)
Replied 25 September 2020
Thanks Yasaswi for your reply.
The Plan is that the existing HK shareholders would take the 3 % of the Indian Director.
I was wondering if the now Indian compliance would agree for transferring this minority 3% to any of the existing HK Company.
Cannot think of selling it to the secondary market. We can only transfer it to either of the 2 HK Company.
SO concerned about the Indian policy due to the fluid situation between india and China.
CAclubindia
