Thanks to Mr. Tharoor for getting me acquaint with Sweat Equity Rules (@ his reputation) thoroughly which otherwise was a wild goose chase. Whether the respective company has duly complied the below provisions or not is subject matter of debate.
By virtue of Section 79(A) of Companies Act, 1956 : "Sweat Equity Shares are those shares issued by company to its employees or directors at a discount or for a consideration other than cash for providing know how, or making available rights in the nature of IPR or value additions".
Further Section 79A(1)(c) provides a company may issue sweat equity shares of a class of shares already issued if not less than one year has at the date of the issue, elasped since the date on which the company was entitled to commence business
Further Section 79A(1)(c) provides a company may issue sweat equity shares of a class of shares already issued if not less than one year has at the date of the issue, elasped since the date on which the company was entitled to commence business
Ceiling on Quantum of issue: Issue size in a year should not exceed 15% of total paidup capital or Rs. 5 Crores which ever is higher. If it exceeds the above size prior approval of Central Govt is mandatory.
Pricing of the Issue: At a fair price calculated by a independent valuer. If the proposed issue is for a consideration other than cash then, the valuation of such Intellectual property is to be done by the independent valuer.
Valuer should submit such report justifying that which is required to be sent to the share holders along with the notice of general meeting.
Special Resolution: As on the date of General meeting such proposal should be approved by passing Special Resolution. If shares to be issued exceeds 1% of issued capital(to identified employees and promoters) a separate resolution should be passed.
Lockin: Shares issued as Sweat Equity should be kept under lock in for a period of 3 years from the date of allotment.
Disclosure in Director's report:
The Director's report should disclose details of issue of sweat equity
Compliance Certificate:
A certificate of compliance should be obtained from PCS or PCA and must be kept before members in Annual General Meeting.
PS:
It is evident from this entire episode that Mr. Tharoor is totally :(): innocent mentor (i still wonder how Kochi team promoters engaged such an innocent guy who can't launder even 75 Crores!) . This shows that he is still an infant in Indian Politics.
Mr. Tharoor utterly(i say) failed to maintain his International classy reputation for which he is known for(like staying at luxorious 5 star hotels, equating travelling Indians with cattle class ). It is evident that he is not a good learner even though he has got alot to learn from Indian politicians like Mr. Madhu Khoda who was charged with whopping 5,000 Crores not JUST 75 Crores.
SAAREY JAHAN SEY ACHAA ....HINDUSTAN(Hope no deemed secularist(s) objects for referring India as Hindustan) HAMARA!
* He is even incognisant of the fundamentals such as seeking admission in a infirmary over pretext of getting heart attack/High Blood Pressure to regain lost ground (Sympathy) of people!
