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    Specified development authority income receives retrospective tax exemption, subject to non-commercial activity, unchanged income sources, and return-...
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      Companies Law

      NCLAT held that Respondent-foreign shareholder was not a...

      Foreign shareholder not promoter; Rule 9A puts demat duty on investor, rights issue and reclassification upheld

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      Companies LawNovember 22, 2025Case LawsAT
      NCLAT held that Respondent-foreign shareholder was not a "promoter" on the date of the rights issue, as it neither exercised control nor held majority shareholding nor had board representation, and had been validly reclassified as "public shareholder/other than promoter" by board resolution prior to the issue. NCLAT clarified that promoter reclassification is permissible for unlisted public companies and SEBI circulars for listed entities are inapplicable. Under Rule 9A, the obligation to hold securities in dematerialised form before subscribing rested on the shareholder; the Appellant's duty was limited to facilitating dematerialisation, which Respondent never sought. Rejection of Respondent's application and continuation of the rights issue were lawful. NCLAT set aside NCLT's order cancelling the rights issue and directing refund, and allowed the appeal, leaving the pending oppression and mismanagement petition to be decided independently.

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      ActsIncome Tax