Under the Companies Act, private placement offers are restricted to no more than 200 persons | Image:Unsplash
In a crackdown on illegal fundraising activities, the Ministry of Corporate Affairs has levied fines totalling nearly Rs 10 crore on two companies and nine individuals for violating private placement norms.
According to orders passed by the Registrar of Companies (RoC), NCT of Delhi & Haryana on April 3, fines were imposed on Planify Capital and four individuals, as well as on Mayasheel Retail India Pvt Ltd (Bazar India) and five individuals.
The penalties were issued under Section 42 of the Companies Act, 2013, which governs the issuance of securities through the private placement route.
Planify Capital and its associated individuals were fined Rs 7 crore, while MayaSheel Retail India and its connected individuals faced penalties amounting to nearly Rs 2.89 crore.
The entities were found to have utilized the crowdsourcing platform ‘Planify’ to reach investors for issuing securities through private placement, in violation of regulatory norms.
The modus operandi involved allocating shares to Planify Capital or its group company, followed by the sale of securities through the online platform to the open market.
Under the Companies Act, private placement offers are restricted to no more than 200 persons in aggregate within a financial year. Additionally, companies are prohibited from publicising such offers through advertisements or media channels, as per Section 42.
The Ministry of Corporate Affairs has been actively pursuing actions against entities involved in illegal fundraising activities, reaffirming its commitment to upholding compliance with company laws.
(With PTI inputs)
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