The corporate affairs ministry is considering a co-ordinated crack down on a score of unlisted companies that have misused the private placement route to raise funds. The move comes close on the heels of the market regulator Securities and Exchange Board of India directing Lucknow-based Sahara Group to refund up to R24,000 crore to investors following its series of private placement issuances. “We are trying to ascertain how many unlisted companies have not followed the basic rules at the time of going for a private issue,” an MCA official told FE. He said that the ministry would ask its network of registrar offices to scrutinise the books of companies for this purpose. MCA's move forms a part of the government's attempts to bring clarity and transparency in the working of the private placements.
Source : Financial Express
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