<p>In a statement, the MCA has clarified that Sahara Prime City intended to go for an IPO and had filed information about its group companies to Sebi in its Draft Red Herring Prospectus.<br />Further, Sebi upon noticing inadequacy in material disclosures had asked information about some Sahara Group companies as per its disclosure requirements.<br /><br />However, the information was not furnished by November 11, 2010, and Sebi passed an interim order issuing show cause to two Sahara Group companies -- SIRECL and SHICL -- and restraining them from mobilising funds from the public.<br /><br />"This order has been challenged by the said companies and the case is now sub judice before the Hon'ble High Court of Allahabad, Lucknow Bench. As this is a matter between the Sahara Group companies and Sebi, the MCA cannot intervene in the matter," the MCA said.<br />The MCA added that in order to check misuse of private placement provisions under the Companies Act, 1956, issued a circular dated 22 November, 2010 mandating its field offices to carefully scrutinise offer documents filed by Unlisted Public Companies proposing to raise money through the private placement route.<br /><br />Besides, it is working on to substitute Unlisted Public Companies ( Preferential Allotment) Rules, 2003 by replacing it with Unlisted Public Companies (Preferential Allotment) Rules, 2011, which would require more disclosures and keeping the securities in demat form.<br />Also, it said checks and balances, coupled with stringent penalty provisions have been built into the Companies Bill to prevent misuse. </p>
<p>In a statement, the MCA has clarified that Sahara Prime City intended to go for an IPO and had filed information about its group companies to Sebi in its Draft Red Herring Prospectus.<br />Further, Sebi upon noticing inadequacy in material disclosures had asked information about some Sahara Group companies as per its disclosure requirements.<br /><br />However, the information was not furnished by November 11, 2010, and Sebi passed an interim order issuing show cause to two Sahara Group companies -- SIRECL and SHICL -- and restraining them from mobilising funds from the public.<br /><br />"This order has been challenged by the said companies and the case is now sub judice before the Hon'ble High Court of Allahabad, Lucknow Bench. As this is a matter between the Sahara Group companies and Sebi, the MCA cannot intervene in the matter," the MCA said.<br />The MCA added that in order to check misuse of private placement provisions under the Companies Act, 1956, issued a circular dated 22 November, 2010 mandating its field offices to carefully scrutinise offer documents filed by Unlisted Public Companies proposing to raise money through the private placement route.<br /><br />Besides, it is working on to substitute Unlisted Public Companies ( Preferential Allotment) Rules, 2003 by replacing it with Unlisted Public Companies (Preferential Allotment) Rules, 2011, which would require more disclosures and keeping the securities in demat form.<br />Also, it said checks and balances, coupled with stringent penalty provisions have been built into the Companies Bill to prevent misuse. </p>