Tag Archives: Non-Convertible

Issue of Non-Convertible/ Redeemable Bonus Preference Shares or Debentures

RBI has clarified vide its circular dated January 6, 2014 that issue by companies of non-convertible/ redeemable bonus preference shares or debentures as a result of a Scheme of Arrangement approved by a Court in India under the provisions of Companies Act, 1956 to non-resident shareholders would not require any RBI approval but would require no objection by the Income tax authorities. So basically this is the issue of bonus preference shares by capitalization of general reserve of a company or debentures pursuant to a Scheme of Arrangement which has been approved by the Courts in India which hitherto required approval from RBI on a case by case basis but has now been liberalised by the RBI so that RBI approval is not required but other conditionalities would require to be complied with. A copy of the RBI circular is http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8667&Mode=0 

 

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