Financing

AAK (Querist) 21 May 2012 This query is : Resolved
Dear Experts pls suggest..

My client want to invest a sum of Rs.20 lacs by purchasing stake of 26% in a "A" company.
whether my client can make an agreement with "A" company that he does not want any share in the profit, but the said sum of 20 lacs should be treated as deposit and returned to him after 2 years.

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ajay sethi (Expert) 21 May 2012
if your client is taking 26%stake in a public limited company it cannot be regarded as a deposit . if your client subseqnently desires to offload its stake it can do so . request the compay to buy bakc the stake in 3 years time . give an option to exit .

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M V Gupta (Expert) 23 May 2012
Holding stake and deposit are two different things. If the company is listed company, then ur friend should take care that he does not violate the SEBI norms on acqiusition of substantial stake in the company. if it is a pvt company then this restriction may not apply. If ur friend wants to make a deposit with the company, then he should get the proper deposit receipt mentioning therein the rate of interest and maturity.The question of security for the amount also should be taken care of.

Saibal Guha Roy (Expert) 23 May 2012
He can invest it as a deposit instead of a stake in the shares. But first find out if the company is eligible to raise deposits from public

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