Unauthorized issuance of shared through public advertisement: MCA imposed fine of Rs. 7 Cr
The Ministry of Corporate Affairs (MCA) has fined a Company Rs. 7 Crore for violating the Companies Act. The company, involved in fundraising for start-ups, facilitated share sales to investors through its platform, breaching Section 42 of the Companies Act, 2013. This unauthorized issuance of securities and public advertising prompted the penalty. Despite a show cause notice from the MCA citing violations such as exceeding the 200-person limit for private placements and using public ads for securities, Company’s response was contradicted by investigations. The adjudication process revealed discrepancies like misleading valuation reports and improper use of the platform for transactions, leading to the penalty for breaching legal provisions.
The copy of the order is as under:
MCA_Imposed_7_crore_penalty_for_violating_Section_42__1712240126 1
