One consequence of the Sebi-Sahara conflict could be an
alteration in the Companies Law. The corporate affairs ministry is
talking about how to change laws to stop ambiguities in the current
legal authorities that regulates share and debenture sales. A top
official in the law ministry says that it is considering of
withdrawing ambiguity in laws governing private placement of
safeties. Sale of securities to more than 50 people is presently
thoughtful as a public issue and, thence, open to close regulatory
investigation. If only 49 entities offer to a share or debt issue,
it is take for private.
The applicable clause in Section 67 of the Companies Act says,
"given that nothing contained in this sub-section shall employ
in a case where the offer or request to offer for shares or
debentures is made to fifty persons or more" Externally the
ministry is wording how to close this loophole. The official said
one way could be to stop it when framing rules below the new
Companies Act. He, even so, did not stipulate how the revised
wording could be. The Act was demode by the Lok Sabha in December
but has to be improved by the Rajya Sabha.
Meanwhile, Sahara is warring a public battle to support its chief
out of jail. At one point of time (in 2010) in the noise Sahara had
claimed that the Corporate Affairs Ministry had parted with it
saying that it had alone jurisdiction to analyze the company on
this issue. The exhalations changed in Sebi's benignity when
the minister changed. Now the courts are also behind the
controller. In full page advertizing taken out in leading dailies
on Sunday and Monday, disputable chief managing worker of Sahara
India Pariwar, Subrata Roy Sahara has openly challenged the Sebi
chairman or any of the controller's senior officials to
face-off with him on live national telecast. The latest crusade
began after Sebi inquired the Supreme Court to order the arrest of
Roy and a few directors in his organization.
Roy wants to argument with Sebi how, with malafide intentions, it
is hard to destruct Sahara's reputation, clean image and
goodwill. Though he has queried Sebi's intention in going after
Sahara, Roy has granted a clean chit to the courts and has
thoughtfully not requested that anyone from the judiciary link
issue with him on live television. When Sahara was first questioned
by Sebi in 2010, it had argued that it does not have legal power
over the debenture sale because it was a private arrangement. The
regulator had then noted Section 67 of the Act to establish legal
Ever since it get down investigating Sahara, it has ellipse around
just one issue as the ownership of the money that Sahara gathered
and the individuality of the investors. While Sahara says that its
army of workers cognize where precisely each of them lives, it is
not amazed the postman cannot find them because they are too poor
and often live by the boundary of national highways in temporary
hovels. Nice try, but Sebi is not believing and it is now back in
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The Ministry of Corporate Affairs notified on June 5, 2015 that certain provisions of the Companies Act, 2013 shall not apply to private limited companies or shall apply with such exceptions or modifications as directed in the notification.
Whilst trade and barter have existed since early times, the modern practice of forming business relationships through the means of contract has come into existence only since the industrial revolution in the West.
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