~Money Laundering~💛

MONEY LAUNDERING is a process of criminal disguise it's illegal origin. When a person or a criminal activities generates a substantial profit either individual or group involved in such activities give a route to the funds to safe heavens by disguising the sources , changing form or moving the funds to a place where they will be less likely to attract attention.

There Are Several Varieties Of Money laundering  :-

Terrorism

Illegal arms

Sales

Financial crimes

Smuggling

Organized crimes 

Drug trafficking

Prostitution rings

Embezzlement

Insider trading

Bribery

Computer fraud

Also produce large profit to create an incentive to legitimise the illegal gains through money laundering.

STAGES OF MONEY LAUNDERING

1) PLACEMENT

2) LAYERING

3) INTEGRATION

PROCESS OF MONEY LAUNDERING

PLACEMENT :- The launderer brings his legal profit into the financial system by breaking the large amount of cash into small conspicuous that are then directly deposited into the bank accounts or by purchasing a series of monetory instruments which are later collected and deposited into accounts at another location.

LAYERING :- In this stage, the launderer engages in a series of conversion or movement of the funds to distance them from their source so the funds simply wire throught a series of accounts at various banks across the globe.

INTEGRATION :- After successful processing a criminal profit throught the first two stage, the launderer moves them to integration in this the funds re-entre the legitimate economy . 

THE LAUNDERE MIGHT CHOOSE TO INVEST THE FUNDS INTO REAL ESTATE ,LUXURY ASSETS OR BUSINESS VENTURES.

PUNISHMENT FOR MONEY LAUNDERING :-

Section 3 of the act states that whosoever directly or indirectly is indulge in the activity connected with crime including its concealment , possession, acquisition, projecting or claiming it's untained property shall be guilty of offence of money laundering.

Section 4 provides that any person who commits the offence of money laundering is punishable with rigorous imprisonment for the term which shall not be less than three(3) years but which may extend upto seven(7) years and also liable to the fine. The proceeds of crime involved in money laundering relates to any offence specified Under the narcotic drugs bad psychotropic substance Act ,the punishment may extend to rigorous imprisonment for ten years.

~Buy-Back~💛

BUY-BACK IS THE PROCESS WHERE BY A COMPANY PURCHASES ITS OWN SHARES OR OTHER SPECIFIED SECURITIES(SHARES) FROM THE HOLDERS FOR :-

*)To improve earnings per share.

*)To improve return on capital, return on net worth and to enhance the long-term shareholder value.

*)To prevent hostile(unwelcome) takeover bids.

*)To return surplus cash to shareholders.

*)To service the equity more effecient.

*)To achieve optimum capital structure.

BUY-BACK of securities are governed by section 68 of companies Act,2013 and rule 17 of companies (share capital and debentures)Rules,2014.

Listed companies have to comply with the requlations laid down by SEBI also in this behalf. Condition for buy back pursuant to section 68(2) of companies Act,2013.

1) Buy back must be authorized by the AOA( Articles Of Association of the company.

2) A company can buy-back upto 25% of the aggregate of paid-up capital and free reserve of the company. In case of equity shares the limit of 25% of paid up capital shall be constructed as25% of equity paid up capital.

3)shares offered for buy back must be fully paid-up.

4) Buy back must be authorized by a special resolution .

AUTHORISATION IN THE ARTICLES

The articles of association of the company should authorise the buy back of shares.in case the provision is not available,it would be necessary to alter the articles of association to authorise buy back. Buy back can be done with the approval of BOD ( boards of directors) at the meeting and/or by special  resolution passed by the shareholders in the GM(general meeting), depending on the quantum of buy back. in case of listed company, approval of shareholders shall be obtained only by pastol ballot [Postal voting is voting in an election where ballot papers are distributed to electors (and typically returned) by post].

METHOD OF BUY-BACK

The buy-back may be :-

*) The existing security holders on a proportionate basis.

*) The open market through

Book-building process (is a process of price discovering. It is a period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to lower price. The offer price is determined after the bid closing date)

*) Stock exchange (place where trading of securities/shares are conducted on an organized manner).

*) Odd lot holders (it refers to an order amount for a security that is less than the normal unit or small unit, which is typically 100 shares for stocks.

BUY-BACK PROCESS

1) Appointment of MERCHANT BANKERS/REGISTRAR.

2) Filing the resolution with SEBI/STOCK EXCHANGES.

3) Public announcement to be released in newspapers and stimultaneous filing with SEBI/STOCK EXCHANGE.

4) File the return with ROC and SEBI.

5) Merchant bankers to FILE A REPORT TO SEBI.

6) ISSUE OF PUBLIC ADVERTISEMENT in national daily on completion of buy-back process 9 determination of offer price, Opening and Closure of buy back offer .

7) ACCEPTANCE AND PAYMENT to security holders

8) Extinguishment of Certificate and intimation to stock exchange.

I HOPE THIS WAS HELPFULL TO YOU ❤️😁👍THANK YOU FOR READING MY BLOG FOR MORE DETAILS READ MY OTHER BLOGS.