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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Mergers

In a scheme under Section 234, Sunrise Auto Ltd (India) is merging into Kyoto Motors Inc (Japan). Which form of consideration to Sunrise's shareholders is expressly mentioned in Section 234(2)?

Section 234(2) allows the scheme to provide consideration to the merging company's shareholders in cash, in Depository Receipts, or partly in cash and partly in Depository Receipts, as the scheme provides. It does not confine payment to rupees, equity shares or debentures.

  1. APayment in cash, in Depository Receipts, or partly in cash and partly in Depository ReceiptsCorrect
  2. BOnly equity shares of the foreign company
  3. COnly payment in Indian rupees
  4. DOnly convertible debentures of the transferee

Explanation

Section 234(2) says the scheme may provide, among other things, for consideration to shareholders of the merging company in cash, in Depository Receipts, or partly in each. The other options name forms not stated there.

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