Inter-corporate Investments Under Indian Law
Keywords:
Inter-corporate investments, Companies Act, Company law, investmentsAbstract
Inter-corporate investments (ICI) stand as a critical mechanism in the corporate landscape, fostering economic growth, collaboration, and synergy among businesses. However, their unchecked proliferation poses risks of mismanagement, diversion of funds, and concentration of economic power. This research paper delves into the multifaceted landscape of ICIs, exploring their role in industrial progress and the regulatory measures aimed at ensuring their prudent utilization. Drawing from
historical cases like those highlighted by the Vivian Bose Commission and the Mundhra Inquiry, alongside contemporary regulatory frameworks like Section 372 of the Companies Act, 1956, and Section 186 of The Companies Act, 2013, this study examines the evolution of regulatory responses to mitigate the adverse effects of ICIs. Furthermore, it investigates the impact of ICIs on shareholder welfare, economic concentration, and public interest, aligning with constitutional directives to safeguard against wealth accumulation detrimental to the broader populace. By analyzing past occurrences, current regulations, and future implications, this research contributes to a nuanced understanding of ICIs' dynamics and the imperative for balanced regulatory interventions to foster responsible corporate behavior and sustainable economic development.
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