Conversion of loan into equity by a bank
manesh jiandani
(Querist) 26 December 2011
This query is : Resolved
a Listed company has defaulted in payment of its dues. the bank has,in terms of the provisions of the laon agreement, sought conversion of loan into equity. however the company has not responded to the said conversion nor acted upon the notice and reminder sent to them. now under these circumstances whether the bank can apporach SEBi/ Exchange with regard to the said inaction of the Company? whether apart from a pecific performance suit whetehr any petition can be filed before CLB? Please guide
R.Ramachandran
(Expert) 26 December 2011
Dear Manesh,
Whether any equity has to be raised or not is to be approved by the Shareholders of the Company.
Neither the SEBI or CLB can be of any help.
The Bank would be better advised to file a suit for recovery instead of seeking conversion of the loan into equity.
prabhakar singh
(Expert) 26 December 2011
rightly advised by expert Mr.R.Ramachandran
