79. Power to issue
shares at a discount.—(1) A company shall not
issue shares at a discount except as provided in this section.
(2) A company may issue at a discount shares in the company
of a class already issued, if the following conditions are
fulfilled, namely:—
(i) the issue of the shares at a discount is authorised by
a resolution passed by the company in general meeting, and
sanctioned by the Central Government;
(ii) the resolution specifies the maximum rate of discount
at which the shares are to be issued:
Provided that no such resolution shall be sanctioned by the
Central Government if the maximum rate of discount specified
in the resolution exceeds ten per cent, unless Central Government
is of opinion that a higher percentage of discount may be
allowed in the special circumstances of the case;
(iii) not less than one year has at the date of the issue
elapsed since the date on which the company was entitled to
commence business; and
(iv) the shares to be issued at a discount are issued within
two months after the date on which the issue is sanctioned
by the Central Government or within such extended time as
the Central Government may allow.
(3) Where a company has passed a resolution authorising the
issue of shares at a discount it may apply to the Central
Government for an order sanctioning the issue; and or any
such application, the Central Government if, having regard
to all the circumstances of the case, it thinks proper so
to do, may make an order sanctioning the issue on such terms
and conditions as it thinks fit.
Provided that in the case of revival and rehabilitation of
sick industrial companies under Chapter VIA, the provisions
of this section shall have effect as if for the words “Central
Government”, the word “Tribunal” had been
substituted.
(4) Every prospectus relating to the issue of the shares
shall contain particulars of the discount allowed on the issue
of the shares or of so much of that discount as has not been
written off at the date of the issue of the prospectus. If
default is made in complying with this sub-section, the company,
and every officer of the company who is in default, shall
be punishable with fine which may extend to five hundred rupees.
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