A corporation cannot be a member of a company which is
its holding company, and any allotment or transfer of shares in a
company to its subsidiary shall be void.
(1A) Subsection (1), insofar as it provides that any transfer of shares
in contravention of it is void, shall not apply to a disposition of bookentry
securities, but a Court, on being satisfied that a disposition of
book-entry securities would in the absence of this subsection be void
may, on the application of the Registrar or any other person, order the
transfer of the shares acquired in contravention of subsection (1).
[Act 36 of 2014 wef 01/07/2015]
(2) Subsection (1) shall not apply where the subsidiary is concerned
as personal representative, or where it is concerned as trustee, unless
the holding company or a subsidiary thereof is beneficially interested
under the trust and is not so interested only by way of security for the
purposes of a transaction entered into by it in the ordinary course of a
business which includes the lending of money.
(3) This section shall not prevent a subsidiary which, on
29th December 1967, is a member of its holding company, from
continuing to be a member but, subject to subsection (2), the
subsidiary shall have no right to vote at meetings of the holding
company or any class of members thereof.