Securities and Exchange Board of India (Sebi) has cautioned retail investors from investing in unlisted companies which are luring investors by issuing securities without complying with the existing laws including The Companies Act, 1956 and various laws introduced by Sebi including Issue of capital and Disclosure Requirements Regulations (ICDR), 2009.
“As per the provisions of Companies Act, 2013 and Sebi Regulations, no issuer shall make public issue of these securities, unless it has made application to the recognized Stock Exchange(s) for listing of such securities. Further, the issuer, among the other things, is required to file the offer document with RoC/Stock Exchange/Sebi etc. The issuer has to make disclosures about the issuer company, the promoters of the company, the risk factors,” the markets regulator said in the circular.
