A listed parent company has two subsidiaries, one of which is also listed

A listed parent company has two subsidiaries, one of which is also listed. It wishes to do a demerger of a business from the listed subsidiary into the unlisted subsidiary. The investment banker advises that under the scheme, the unlisted subsidiary would be subject to backdoor listing. In order to prevent such a situation, the parent company proposes to issue its own shares in exchange for the shares of the unlisted subsidiary. Such a scheme would be invalid as the parent company has no locus standi under  the demerger.

(a) Yes    (b) No