(12.10.14) lnvestments to be in its Own Name

AII investments made by a company on its own behalf shall be made and held by it in its own name. There are, however, certain exceptions to this rule. These exceptions are as follows:

            1. If any other law, for the time being in force, permits, the investments of the

company may be made and held by it in its own name.

            2.  Where the company has a right to appoint any person or persons as a director or directors of any other body corporate, shares in such other body corporate up to an amount not exceeding the nominal value of the qualification shares may be registered or held by the body corporate jointly in the names of the company itself and of each such person or nominee or in the name of each such director.

            3.  A company may hold any shares in its subsidiary in the name or names of

any nominee or nominees of the company to ensure that the number of members of

any subsidiary is not reduced, where it is a public company, below z and where it

is a private company, below 2.

            4.  If the investments are made by a company, whose principal business consists of the buying and selling of shares or securities, the company may hold its investments in any other name. Securities include stock and debentures.

            5.  A company may deposit with a bank, being the bankers of the company, any shares or securities for the collection of any dividend or interest payable thereon.

            6.  A company may deposit, or transfer to, or hold in the name of, the State Bank of India or a Scheduled Bank, being the bankers of the company, shares or securities, in order to facilitate the transfer thereof. The company can do so only for period of 6 months. If the transfer of such shares or securities does not take place within 6 months, the company shall, as soon as practicable after the expiry of that period of 6 months, have the shares or securities re-transferred to it from the State Bank of India or the Scheduled Bank or, as the case may be, again hold the shares or securities in its own name.

            7.  A company may deposit with, or transfer to, any person any shares or securities, by way of security for the repayment of any loan advanced to the company for the performance of any obligation undertaken by it.

The certificate or letter of allotment relating to the shares or securities in which investments have been made by a company shall, except in cases (4) to (7) referred to above, be in the custody of the company or with the State Bank of India, or a Scheduled Bank, being the bankers of the company.

Where any shares or securities in which investments have been made by a company are not held by it in its own name, the company shall enter in a register maintained by it for the purpose: (a) the nature, value and such other particulars as may be necessary fully to identify the shares or securities in question; and (b) the bank or person in whose name or custody the shares or securities are held. The register shall be open to the inspection of any member or debentureholder of the company. If any inspection of the register is refused, the Company Law Board may, by order, direct an immediate inspection of the register.

If default is made in complying with s.49, the company and every officer of the company who is in default, shall be punishable with fine which may extend to Rs 50,000.