02-28-2005, 07:51 PM
Dear Ali,
Can u quote me the section which says that Redeemable capital should not be interest based,
I think u r referring the section 2(30-A), but it doesnt say that R.C should be non interest based.
It says that R.C. includes "any other security or obligation not based on interest other than an ord. share of the company"
the above defn. has included the TFCs, PTCs etc. specifically as R.C. bcaz these are specific terms commonly used and included in R.C. and these are interest bearing.
Therefore in case of non participatory R.C. the return is usually the interest on related securities.
In Pakistan u can see lot of Non Participatory TFCs (interest bearing) issued by various companies.
I hope this will clear ur confusion.
Take care.
SMR
Can u quote me the section which says that Redeemable capital should not be interest based,
I think u r referring the section 2(30-A), but it doesnt say that R.C should be non interest based.
It says that R.C. includes "any other security or obligation not based on interest other than an ord. share of the company"
the above defn. has included the TFCs, PTCs etc. specifically as R.C. bcaz these are specific terms commonly used and included in R.C. and these are interest bearing.
Therefore in case of non participatory R.C. the return is usually the interest on related securities.
In Pakistan u can see lot of Non Participatory TFCs (interest bearing) issued by various companies.
I hope this will clear ur confusion.
Take care.
SMR
