187. Investments of company to be held in its own name

(1) All investments made or held by a company in any property, security or other

asset shall be made and held by it in its own name:

Provided that the company may hold any shares in its subsidiary company in the

name of any nominee or nominees of the company, if it is necessary to do so, to ensure

that the number of members of the subsidiary company is not reduced below the statutory

limit.

(2) Nothing in this section shall be deemed to prevent a companyŚ

(a) from depositing with a bank, being the bankers of the company, any shares or

securities for the collection of any dividend or interest payable thereon; or

(b) from depositing with, or transferring to, or holding in the name of, the State

Bank of India or a scheduled bank, being the bankers of the company, shares or

securities, in order to facilitate the transfer thereof:

Provided that if within a period of six months from the date on which the shares

or securities are transferred by the company to, or are first held by the company in the

name of, the State Bank of India or a scheduled bank as aforesaid, no transfer of such

shares or securities takes place, the company shall, as soon as practicable after the

expiry of that period, have the shares or securities re-transferred to it from the State

Bank of India or the scheduled bank or, as the case may be, again hold the shares or

securities in its own name; or

(c) from depositing with, or transferring to, any person any shares or securities,

by way of security for the repayment of any loan advanced to the company or the

performance of any obligation undertaken by it;

(d) from holding investments in the name of a depository when such investments

are in the form of securities held by the company as a beneficial owner.

(3) Where in pursuance of clause (d) of sub-section (2), any shares or securities in

which investments have been made by a company are not held by it in its own name, the

company shall maintain a register which shall contain such particulars as may be prescribed

and such register shall be open to inspection by any member or debenture-holder of the

company without any charge during business hours subject to such reasonable restrictions

as the company may by its articles or in general meeting impose.

(4) If a company contravenes the provisions of this section, the company shall be

punishable with fine which shall not be less than twenty-five thousand rupees but which

may extend to twenty-five lakh rupees and every officer of the company who is in default

shall be punishable with imprisonment for a term which may extend to six months or with fine

which shall not be less than twenty-five thousand rupees but which may extend to one lakh

rupees, or with both.