Recently, the RoC, NCT of Delhi and Haryana, passed an order for violation of section 42 of the Act pertaining to private placement of securities. A threshold limit has been set out in the Act that an offer or invitation to subscribe securities under private placement shall not be made to persons exceeding 50 or such other higher number as prescribed by the rules, that is, 200. The same can be substantiated by the Sahara case Further, the Act also states that no company issuing securities through private placement should release any public advertisements or use any media, marketing, or distribution channels or agents to inform the general public about such issues.
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