KPC Limited, a public limited company registered under the Companies Act, 2013 is based in Delhi. Sunita Verma, a relative of one of the directors intends to purchase its 5000 shares @ ₹ 100 each for which she wants some

Section 67(2) of the Companies Act, 2013 provides that public company shall not give, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of, or in connection with, a purchase or subscription made or to be made, by any person of or for any shares in the company or in its holding company. An exception being the lending of money by a banking company in the ordinary course of its business {(section 67(3)(a)}, any scheme approved by company through special resolution {(section 67(3)(b)} or loan to employees up to 6 months of salary for beneficial ownership {section 67(3) (c)}. In light of the above-mentioned provisions, KPC Limited, being a public limited Company cannot give financial assistance for purchase of its shares to Sunita Verma, a relative of one of the directors and hence the proposal of Board of Directors is not valid.