Adventure Voyage Ltd. is a company engaged in the business of providing travel related services to its customers. It has its own boats and ships and provides adventure tours through sea route from Chennai and Kolkata in

According to section 42(1) of the Companies Act, 2013 (the Act), a company may, subject to the provisions of section 42, make a private placement of securities. According to section 42(2) of the Act, a private placement shall be made only to a select group of persons who have been identified by the Board of the company, whose number shall not exceed fifty or such higher number as may be prescribed. Further, section 42(11) of the Act states that notwithstanding anything contained in 42(9) and 42(10), any private placement issue not made in compliance of the provisions of section 42(2) shall be deemed to be a public offer and all the provisions of Companies Act, 2013 and the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992 shall be applicable. If the company complies with the conditions provided for private placement as specified under section 42 of the Companies Act, 2013 and rules made thereunder, the company may issue non-convertible debentures without the approval of Securities and Exchange Board of India (SEBI). However, if the company does not comply with the above said conditions the Company is required to comply with the provisions of Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (said regulations). Regulation 3(b) of the said regulations states that the regulations shall apply to the issuance and listing of non-convertible securities by an issuer issued on private placement basis which are proposed to be listed. Further, as per Regulation 5(1)(c) of the said regulation, a company shall not allowed to make an issue of non-convertible securities if as on the date of filing of draft offer document or offer document the issuer or any of its promoters or directors is a wilful defaulter except in case of private placement of non-convertible securities. Accordingly, despite its promoters and Directors being wilful defaulters the Company is allowed to make an issue of the non-convertible securities on private placement, if the said securities are proposed to be listed in accordance with the Regulations. Under the regulations, the Company is not required to obtain approval from the Securities Exchange Board of India for issue of non-convertible securities. However, as per Regulation 6 of the aforesaid Regulations, the company is required to obtain an in-principle approval for listing of its non-convertible securities from one or more stock exchange(s) where such securities are proposed to be listed. Further, Regulation 52 of the said regulations deals with the inspection by the SEBI. It provides that - The Securities Exchange Board of India (SEBI) may suo-moto or upon information received by it, appoint one or more persons to undertake the inspection of the books of account, records and documents of the issuer or lead manager(s) or any other intermediary associated with the issue, for any of the following purposes, namely, - to verify whether the provisions of the SEBI Act, 1992, the Companies Act, 2013, Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and/or the rules and regulations made thereunder in respect of issue of securities have been complied with; to verify whether the requirements in respect of issue of non-convertible securities as specified in these regulations have been complied with; to verify whether the requirements of listing conditions and continuous disclosure requirements have been complied with; to inquire into the complaints received from investors, other market participants or any other persons on any matter of issue and transfer of non-convertible securities governed under these regulations; to inquire into affairs of the issuer in the interest of investor protection or the integrity of the market governed under these regulations; and, to inquire whether any direction issued by the Board has been complied with. While undertaking an inspection under these regulations, the inspecting authority or the SEBI, as the case may be, shall follow the procedure specified by the Board for inspection of the intermediaries.