Section 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 shares in its subsidiary company in the name of any nominee or nominees of the company, where necessary 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 company—
(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;
(b) from depositing with, 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, subject to the statutory six-month requirement for re-transfer where no transfer takes place;
(c) from depositing with, transferring to or holding with any person any shares or securities by way of security for repayment of any loan advanced to the company or performance of any obligation undertaken by it; or
(d) from holding investments in the name of a depository where the investments are securities held by the company as beneficial owner.
(3) Where investments are not held in the company’s own name under clause (d), the company shall maintain a prescribed register open to inspection by members or debenture-holders during business hours.
(4) If a company is in default in complying with this section, the company shall be liable to a penalty of five lakh rupees and every officer in default shall be liable to a penalty of fifty thousand rupees.
