Companies Act, 2017

PART-VII

POWERS OF COURT HEARING APPLICATION

Companies Act, 2017 PART-VII POWERS OF COURT HEARING APPLICATION From: 2023-11-01 - To: 0000-00-00 272. Imposition of restrictions on shares and debentures and prohibition of transfer of shares or debentures in certain cases- (1) Where it appears to the Commission in connection with any investigation that there is good reason to find out the relevant facts about any shares, whether issued or to be issued, and the Commission is of the opinion that such facts cannot be found out unless the restrictions specified in sub-section (2) are imposed, the Commission may, by order, direct that the shares shall be subject to the restrictions imposed by sub-section (2) for such period not exceeding one year as may be specified in order: Provided that, before making an order under this sub-section, the Commission shall provide an opportunity of showing cause against the proposed action to the company and the persons likely to be affected by the restriction. (2) So long as any shares are directed to be subject to the restrictions: imposed by this sub-section- (a) any transfer of those shares shall be void; (b) where those shares are to be issued, they shall not be issued; and any issue thereof or any transfer of the right to be issued therewith, shall be void; (c) no voting right shall be exercisable in respect of those shares; (d) no further shares shall be issued in right of those shares or in pursuance of any offer made to the holder thereof; and any issue of such shares or any transfer of the right to be issued therewith, shall be void; (e) except in a liquidation, no payment shall be made of any sums due from the company on those shares, whether in respect of dividend, capital or otherwise; and (f) no change other than a change by operation of law shall be made in the directors or the chief executive. (3) Where a transfer of shares in a company has taken place and as a result thereof a change in the directors of the company is likely to take place and the Commission is of opinion that any such change will be prejudicial to the public interest, the Commission may, by order, direct, that- (a) the voting rights in respect of those shares shall not be exercisable for such…