Investa India Ltd has ₹ 20,000 crore as paid up share capital with ₹ 2,000 crores as free reserves. It has ₹ 1,000 crores in its securities premium account. It has made a loan to Investa LLP of ₹ 13,000 crore without tak

In pursuant to provisions of Section 186(2) of the Companies Act, 2013, no company shall directly or indirectly give any loan to any person or other body corporate; give any guarantee or provide security in connection with a loan to any other body corporate or person; and acquire by way of subscription, purchase or otherwise, the securities of any other body corporate exceeding 60% of its paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account, whichever is more. In case, where the aggregate of the loans and investment so far made, the amount for which guarantee or security so far provided to or in all other bodies corporate along with the investment, loan, guarantee or security proposed to be made or given by the Board, exceed the above mentioned limits, no investment or loan shall be made or guarantee shall be given or security shall be provided unless previously authorised by a special resolution passed in a general meeting. In the instant case, Investa India Ltd. has ₹20,000 crore as paid up share capital with ₹2,000 crore as free reserves. It has ₹1,000 crore in its securities premium account. It has made a loan to Investa LLP of ₹13,000 crore. Hence, approval of members in General Meeting is not required as per Section 186(3) of the Companies Act, 2013 as loan given is less than 60% of paid up share capital, free reserve and securities premium account, however the company must take consent of all the directors present at the board meeting before giving loan as per Section 186(5) of the Companies Act, 2013. In case Investa India Ltd. is a Government Company Section 186(2) of the Companies Act, 2013 shall not apply if engaged in defence production or it is a Government company other than the listed company, in case such company obtains approval of the Ministry or Department of Central Government which is administratively in charge of the company or State Government, as the case may be.