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of <h1>Rights issue process for increasing subscribed share capital: time-bound offers to existing shareholders upheld; special-resolution routes clarified.</h1> Where a company having share capital proposes to increase its subscribed capital by issuing further shares, it must first offer them to existing equity shareholders proportionately through a time-bound notice (minimum 15 days or such lesser period as prescribed, and maximum 30 days), including a right of renunciation unless the articles provide otherwise, and may dispose of declined shares in a manner not disadvantageous to shareholders and the company; the offer notice must be dispatched with proof of delivery to all existing shareholders at least three days before opening of the issue. Further shares may also be issued to employees under an employees' stock option scheme by special resolution, or to any persons by special resolution for cash or non-cash consideration with price determined by a registered valuer's valuation report. The section excludes conversions under pre-approved debenture/loan conversion options, but permits Government-ordered conversion with a right of appeal to the Tribunal, and consequent automatic increase and alteration of authorised share capital where applicable.
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