Cross-holdings

82 Subsidiary may not hold shares in holding company

(1)

Subject to this section, a subsidiary must not hold shares in its holding company.

(2)

An issue of shares by a holding company to its subsidiary is void and of no effect.

(3)

A transfer of shares in a holding company to its subsidiary is void and of no effect.

(4)

Where a company that holds shares in another company becomes a subsidiary of that other company—

(a)

the company may, notwithstanding subsection (1), continue to hold those shares; but

(b)

the exercise of any voting rights attaching to those shares shall be of no effect.

(5)

Where a company on reregistration under this Act in accordance with the Companies Reregistration Act 1993 held shares in another company and was a subsidiary of that other company,—

(a)

the company may, notwithstanding subsection (1), continue to hold those shares; but

(b)

the exercise of any voting rights attaching to those shares shall be of no effect.

(6)

Nothing in this section prevents a subsidiary holding shares in its holding company in its capacity as a personal representative or a trustee unless the holding company or another subsidiary has a beneficial interest under the trust other than an interest that arises by way of security for the purposes of a transaction made in the ordinary course of the business of lending money.

(7)

This section applies to a nominee for a subsidiary in the same way as it applies to the subsidiary.