NEW DELHI: Govt has imposed a penalty on Planify Capital, which calls itself a startup marketplace to invest in startups pre-IPOs and unicorns, and a small-time retailer Mayasheel Retail for using the platform to sell shares indirectly to investors.
Maximum penalty under the law has been imposed by the registrar of companies (RoC) for Delhi and Haryana. The cases have thrown light on how companies were seeking to circumvent the law to raise funds.
The modus operandi in both cases was similar. Mayasheel Retail sold shares to Planify Capital, which in turn sold it to other investors through its platform. Further, following Covid, promoters of Mayasheel Retail sold their own shares to the platform at a steep discount to valuation, which were sold by Planify to raise money for itself.
Similarly, Planify Capital, a Gurugram based entity, sold its shares to Planify Enterprises, which then hawked them to 76 investors.
In both cases, the conclusion was similar. There was a violation of provisions related to the Companies Act, as Planify operated as a “distribution channel” for selling shares to investors. “The nature of business is evident… and the company has not even registered itself as a non-banking finance company (NBFC). The business of the company involves risks for the retail investors, which may lead to injury to public interest,” the order issued on Wednesday said.
The order in case of Mayasheel has said that the real intention was to issue shares to the public at large and the transaction with Planify was a “smokescreen”.
The failure to register as an NBFC may also attract RBI’s attention in the coming days as the regulator is keen to ensure that there is no fund raising without adequate regulation. On its website Planify claims to have offered 34 “exits” and 250% return with some of the exits at “1,000-2,000%” return.
These transactions were also advertised in the media, some of it masquerading as news, the RoC has said that there was a violation of legal provisions, which bar ads or use of media or marketing channels about the issue of shares.
