Prohibition for buy-back in certain circumstances - As per section 70 of the Companies Act, 2013, a company cannot buy-back shares or other specified securities, directly or indirectly-
(a) through any subsidiary company including its own subsidiaries; or
(b) through investment or group of investment companies; or
(c) when the company has defaulted in the repayment of deposit or interest thereon, redemption of debentures or preference shares or payment of dividend or repayment of any term loan or interest thereon to any financial institution or bank.
The prohibition is lifted if the default has been remedied and a period of 3 years has elapsed after such default ceased to subsist.
(d) Company has defaulted in: filing of Annual Return (section 92), declaration of dividend (section 123) or punishment for failure to distribute dividend (section 127) and financial statement (section 129)
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