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Per Sec 70, a company shall NOT purchase its own shares through:
AOnly through investment companies
BOnly through subsidiary companies
CAny subsidiary company, investment company, or while default subsists in repayment of deposit/dividend/loan
DBuy-back is never prohibited
Answer & Solution
Correct answer: C. Any subsidiary company, investment company, or while default subsists in repayment of deposit/dividend/loan
1. Step 1: Sec 70(1) prohibits buy-back through subsidiaries, investment companies, or while certain defaults subsist.
2. Step 2: Defaults: deposits, debentures, preference share redemption, dividends, term loans.
3. Step 3: Hence (A).
_Source: ICAI BoS CA Inter Paper 1, Ch 12 "Buy-Back of Securities"_