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CS Professional · Strategic Management and Corporate Finance · Raising of Funds from Equity and Procedural Aspects - Public Funding

Kaveri Engineering Ltd's rights offer was accepted by shareholders only in part, and some shares remain unsubscribed after the notice period expires. What does section 62(1)(a)(iii) permit the Board to do with them?

The Board may dispose of the unsubscribed shares in a manner that is not disadvantageous to the shareholders and the company. This power arises after the offer period expires or on earlier decline, and it does not need Tribunal approval.

  1. ADispose of them in a manner not disadvantageous to the shareholders and the companyCorrect
  2. BCancel the shares and reduce authorised capital automatically
  3. CAllot them only to the promoters at face value
  4. DDispose of them only after obtaining Tribunal approval

Explanation

After the time in the notice expires, or on earlier decline by the offeree, the Board may dispose of the shares in a manner not disadvantageous to shareholders and the company. No Tribunal approval is mentioned, and there is no promoter-only restriction.

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