XYZ Limited has during the financial year 2019-20, made private placement of 15,00,000 equity shares of ₹10 each at a issue price of ₹15 per share as below. The private placement is made to 230 persons including 10 quali

Section 42(1) read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 prescribes that a private placement shall be made only to a select group of persons who have been identified by the Board, whose number shall not exceed 200 in the aggregate in a financial year [excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62], subject to such conditions as prescribed. However, the company has not complied with the provisions of Section 42(2) read with Rule 14 as private placement is made to 230 persons (including 10 qualified institutional bidders) which is more than 200 the maximum number prescribed.