Mr. X who is a citizen of Pakistan, is a shareholder of an Indian company. The company held its last AGM on 15 September, 2018. There was a war between India and Pakistan between 10th August, 2018 and 28th September, 201
CS Executive · Company Law · PYQS · December 2018
Mr. X who is a citizen of Pakistan, is a shareholder of an Indian company. The company held its last AGM on 15 September, 2018. There was a war between India and Pakistan between 10th August, 2018 and 28th September, 2018. Mr. X did not receive the AGM Notice and consequently could not do e-voting. He complained to the Chairman of the Company about non-receipt of AGM Notice resulting in non-exercise of e-voting. Comment on the eligibility and voting by Mr. X under the relevant provisions of the Companies Act, 2013.
Answer & Explanation:
A foreigner may take shares in an Indian company and become a member subject to the provisions of the Foreign Exchange Management Act, 1999, but in the event of war with his country, he becomes an alien enemy and his power of voting and his rights to receive notices are suspended. Accordingly, in the given case there was a war between India and Pakistan between 10th August, 2018 and 28th September, 2018, the act of the chairman to suspend voting shareholder of enemy country is valid.
Topics: Membership
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