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CS Executive · Capital Market and Securities Laws · Buy-Back of Securities

Anand Motors Ltd closed its preceding buy-back offer on 10 June 2025. It had defaulted in repaying a term loan instalment to a bank, and the default was remedied on 1 September 2025. Which statement is correct regarding a fresh buy-back under the Companies Act, 2013?

Both bars apply. No offer may be made within one year of closure of the preceding offer, and because of the term loan default, a buy-back is prohibited until the default is remedied and three years have lapsed after it ceased. Remedying alone is not enough.

  1. AA fresh offer may be made from 11 June 2026, and the default is irrelevant since it was remedied
  2. BA fresh offer cannot be made before 11 June 2026, and also not until three years have lapsed after the default ceased on 1 September 2025Correct
  3. CA fresh offer can be made once the default is remedied, with no waiting period
  4. DA fresh offer cannot be made for six months after 1 September 2025 only

Explanation

Two separate conditions apply. No buy-back offer may be made within one year from closure of the preceding offer, and a company that defaulted in repayment of a term loan to a bank is barred unless the default is remedied and three years have lapsed after it ceased. Remedying alone does not lift the bar, so both conditions must be met.

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