State with reasons whether the companies are allowed to make public issue under SEBI (ICDR) Regulations, 2018. (b) Sinha is one of the Board of Directors of VG Garments Ltd., against whom a warrant for arrest in relation
CS Executive · Securities Laws and Capital Markets · PYQS · December 2023
State with reasons whether the companies are allowed to make public issue under SEBI (ICDR) Regulations, 2018. (b) Sinha is one of the Board of Directors of VG Garments Ltd., against whom a warrant for arrest in relation to a Scheduled offence has been issued by the Court. Sinha left India to keep off criminal prosecution and refused to return to India.
Answer & Explanation:
No, VG Garments Ltd. is not allowed to make a public issue in this scenario. As per Regulation 5(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, an issuer shall not be eligible to make an initial public offer if any of its promoters or directors is a fugitive economic offender. In the given case, Sinha, a director of VG Garments Ltd., has a warrant for arrest issued against him for a Scheduled offence, and he has left India to avoid criminal prosecution and refused to return. This clearly categorizes him as a fugitive economic offender. Therefore, VG Garments Ltd. is not permitted to make a public issue under the SEBI (ICDR) Regulations, 2018.
Topics: SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
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