Pledge of promoter shares allowed to secure external commercial borrowings subject to authorised dealer no objection and conditions. Promoters of Indian companies that have raised external commercial borrowings may pledge shares of the borrowing company or its resident associates to secure those ECBs only with prior no objection from a bank authorised dealer. The authorised dealer must ensure compliance with ECB guidelines, an executed loan agreement containing a security clause, and that a Loan Registration Number has been obtained. The pledge must be co terminous with the ECB maturity; transfers on invocation must comply with FDI policy and Reserve Bank directions; and the statutory auditor must certify permitted use of ECB proceeds.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Pledge of promoter shares allowed to secure external commercial borrowings subject to authorised dealer no objection and conditions.
Promoters of Indian companies that have raised external commercial borrowings may pledge shares of the borrowing company or its resident associates to secure those ECBs only with prior no objection from a bank authorised dealer. The authorised dealer must ensure compliance with ECB guidelines, an executed loan agreement containing a security clause, and that a Loan Registration Number has been obtained. The pledge must be co terminous with the ECB maturity; transfers on invocation must comply with FDI policy and Reserve Bank directions; and the statutory auditor must certify permitted use of ECB proceeds.
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