Issued Capital "4C. (1) The issued capital of the Development Bank of seven hundred and fifty three crores of rupees which stands fully vested in, and subscribed by the Central Government immediately before the commencement of the Industrial Development Bank of India (Amendment) Ordinance, 1904 shall, on such commencement stand divided into seventy five crores and thirty lakhs equity shares of rupees ten each.
(2) The Board may, from time to time, increase the issued equity share capital of the Development BanL by allotment of shares to such persons and on such terms and conditions as the Board maiy determine:
Provided that no increase in the issued equity capital shall be made in such a manner that the Central Government holds at any time less than fifty-one per cent, of the issued equity cipital of the Development Bank.
Reduction of share capital.
4D. (i) The Development Bank may, by a resolution passed in a general meeting of the shareholders, reduce its share capital in any way.
(2) Without prejudice to the generality of the foregoing power, the shard capital may be reduced by,—
(a) extinguishing for reducing the liability on any of its equity shares in respect of share capital not paid up;
(b) either with or without extinguishing or reducing liability1 on any of its equity shares, cancelling any paid up sihiare capital which is lost, or is unrepresented by available assets; or SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 3
(c) either with or without extinguishing or reducing liability on any of its equity shares, paying off any paid up share capital which is in excess of the wants of the Development Bank.
(3) In any general meeting referred to in sub-section (1), the resolution for reduction of share capital shall bo passed by shareholders entitled to vote, voting in person, or, where proxies are allowed, by proxy, and the votes cast in iavour of the resolution arc not less than three times the number of the votes, if any, cast against the resolution by shareholders so entitled and voting.
4E. (/) The Central Government may, at any time after the commencement of the Industrial Development Bank of India (Amendment) Ordinance, 1994 by notification in the Official Gazette, convert such number of equity shares held by it not exceeding fifty crores as it may decide into redeemable preference shares.
(2) The redeemable preference vhares referred to in subsection (1) shall—
(a) carry such fixed rate of dividend as the Central Government may specify at the time of such conversion, and
(b) neither be transferable nor carry any voting rights.
(3) The redeemable preference shares referred to in sub-section
(1) shall be redeemed by the Development Bank within three year* from the date of such conversion in such instalments and in such manner as the Board may determine.".
Conversion of equity shares into redeomable preference shares.
5. In section 5 of the principal Act,—
(a) for sub-sections (1) and (2), the following shall be substituted, namely:— "(1) The general superintendence, direction and management of the affairs and business of 'the Development Bank shall vest in a Board of Directors which may exercise all powers and do all such acta and things, as may be exerciped or done by the Development Bank and are not h\ this Aci expiessly directed or required t0 be done by the Development B.mk in genor-U meeting.
(2) The Board mav direct thai any power excrcisenble by it under ihis Aci shall also be exerciseable in such cases and subject to such conditions, if any, as may be specified by it, by the chairman, managing director o r the whole-time director.";
(b) sub-section (4) shall be omiited, Amend, moot of section
5.
6. In section 6 of ihe principal Act,—
(a) for sub-section (I), the following sub-section shall be substituted, namely: — "(1) The Board shall consist of 'he following, namely: — : (&) a chairman and a managing director appointed by the Central Government:
Aoiondmon,t of section fi.
4 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
Provided that the same person may be appointed to function both as chairman and as managing director;
(b) one whole-time director appointed by ihe Ceniral Government on the recommendation of the Board;
(c) two directors who shall be officials of 'he Central Government nominated by the Central Government;
(d) three directors from amongst persons having special knowledge of, and professional experience in, science, technology, economics, industry, banking, industrial cooperatives, law industrial finance, investment, accountancy, marketing or any other matter, the special knowledge of.
and professional experience in, which would, in the opinion of the Central Government, be useful io the Developmen.
Bank, nominated by the Central Government; and
(e) such number of directors elected, in the prescribed manner, by shareholders other than the Central Government, whose names are entered on trie register of shareholders of the Development Bank ninety days before the date of the meeting in which such election takes place on 'he following basis, namely: —
(i) where the total amount o£ equity share capital issued t0 such shareholders is ten per cent, or less of the total issued equity capital, two directors;
(ii) where the total amount of equity share capital issued to such shareholders is more than ten per cent.
but less than twenty-five P«r cent, of the total issued equity capital, three directors; and
(in) where the total equity share capital issued to such shareholders is twenty five per cent, or more of the total issued equity capital, four directors:
Provided that until the assumption of charge by the elected directors under clause (e), the Central Government may at anytime nominate such number of directors, not exceeding four, from amongst persons having) special knowledge of, and professional experience in, science, technology, economics, industry, banking, industrial cooperatives, law, industrial finance, investment, accountancy, marketing or any other matter, the special knowledge of, and professional experience in, which would, in the opinion of the Central Government, be useful to the Development Bank for carrying out its functions.";
(b) in sub-sections (2) and (3), for the words "the chairman and the managing director", the words "the chairman, the managing director and the whole-time director" shall be substituted;
(c) in sub-sections (2A) and (3A), for the words "the chairman or the managing director" wherever they occur, the words "the chair- SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 5 man, Lhe managing director or the whole-time director shall be substituted;
(d) for sub-section (4A), the following sub-section shall be substituted, namely: — "(4A) Subject to the provisions of sub-section (4),—
(a) every director nominated under clause (d) of subsection (1) shall hold office for such term not exceeding three years as the Central Government may specify in this behalf and thereafter until his successor assuaie3 office, and shall be eligible for re-nominatioii:
Provided that no such director shall hold office continuously for a period exceeding six years; and
(b) every director elected under clause (e) of subsection (1) shall hold office for such term not exceeding until his successor assumes office, and shall be eligible for re-election:
Provided further that no such director shall hold office continuously for a period exceeding six years;";
(e) after sub- section (4A), the following .sub-section shall be inserted, namely: — "(4B) The shareholders other than the Central Government, may, after giving to the director a reasonable opportunity of being heard in the manner ag may be prescribed, by resolution passed by majority of the votes of such shareholders holding in the aggregate not less than one-half of the share capital held by such shareholders, remove any director elected under clause (e) of sub-section (1) and elect another director in his place to fill 'he vacancy so caused.";
(f) for sub-section ( ' ) , ihe following shall be substituted, namely:— "'(•*.) (0 A meeting of the Board shall be held at least once every three months and afeleast four meetings shall be held every year and the meetings may be held at such pLices as may be prescribed;
(ii) Notice of every meeting of the Board shall be given in writing to every director for the time being in India, and a< his usual address In India to every other director.
C>A) Subject to the provisions contained in ihis Chapter, the Board may meet at such times and places and shall observe such rules of procedure in regard t0 transaction of its business including the manner of adoption of resolution^ as may be prescribed "'.
7. Section 6A of the principal Act shall be omitted. Omis- Mon of section fiA.
6 THE GAZETTE OF INDIA EXTRAORDINARY [PART IT— Insertion of new sections 6B and