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 any shares in its subsidiary company in the name of any
nominee or nominees of the company, if it is necessary to do so, 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; or
(b) from depositing with, or 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:
Provided that if within a period of six months from the date on which the shares or securities are
transferred by the company to, or are first held by the company in the name of, the State Bank of
India or a scheduled bank as aforesaid, no transfer of such shares or securities takes place, the
company shall, as soon as practicable after the expiry of that period, have the shares or securities re-
transferred to it from the State Bank of India or the scheduled bank or, as the case may be, again hold
the shares or securities in its own name; or
(c) from depositing with, or transferring to, any person any shares or securities, by way of
security for the repayment of any loan advanced to the company or the performance of any obligation
undertaken by it;
(d) from holding investments in the name of a depository when such investments are in the form
of securities held by the company as a beneficial owner.
(3) Where in pursuance of clause (d) of sub-section (2), any shares or securities in which investments
have been made by a company are not held by it in its own name, the company shall maintain a register
which shall contain such particulars as may be prescribed and such register shall be open to inspection by
any member or debenture-holder of the company without any charge during business hours subject to
such reasonable restrictions as the company may by its articles or in general meeting impose.
(4) If a company contravenes the provisions of this section, the company shall be punishable with fine
which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees
and every officer of the company who is in default shall be punishable with imprisonment for a term
which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but
which may extend to one lakh rupees, or with both.
