ABC Ltd. issued a prospectus for the subscription of its shares for Rs.500 crores in 2008. The issue was oversubscribed by 20times. The company issued shares to all the applicants on a pro-rata basis. Later SEBI inspected the prospectus and found some misleading statement about the management of the company in it. SEBI imposed a penalty of Rs.5 crores and banned its three executive directors for dealing in the securities market for three years. Identity the function.

Protective function

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Development function

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Regulatory function

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None of the above

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Solution

The correct option is A
Protective function

Protective function: To protect the interest of investors.

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Similar questions

Q. ABC Ltd. issued prospectus for the subscription of its shares for Rs.

500

crores in

2008

. The issue was oversubscribed by

20

times. The company issued shares to all the applicants on pro-rata basis. Later SEBI inspected the prospectus and found some misleading statement about the management of the company in it. SEBI imposed a penalty of Rs.

5

crores and banned its three executive directors for dealing in securities market for three years. Identify the function and its type performed by SEBI in the given case.

Guru Ltd. invited applications for issuing 5,00,000 equity shares of Rs 10. each at a premium or Rs 5 per share. Because of favourable market conditions the issue was oversubscribed and applications for 15,00,000 shares were received.

Suggest the alternatives available to the Board of Directors for the allotment of shares?

Q. X Ltd. invited application for 10,000 Equity Shares of ₹ 10 each issued at par . The amount was payable on application . The issue was oversubscribed by 2,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.

Q. Sangam Ltd. invited applications for 10,000 Equity Shares of ₹ 100 each issued at par. The amount was payable on application. The issue was oversubscribed by 2,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.

Q. A limited company issued a prospectus inviting application for 2,000 shares of Rs.10 each at premium of Rs. 2 per share payable ass follows:
On application - Rs. 2
On allotment - Rs. 5 (including premium)
On 1st call - Rs. 3
On llnd final call - Rs. 2
Application were received for 3,000 shares and allotment was mad on pro-rata basis to applicant of 2,400 shares. Money received in excess on application was adjusted towards allotment.
Ramesh whom 40 shares were allotted, failed to pay allotment money & first call his shares were forfeited. Find the number of shares Ramesh has applied for?

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The correct option is A Protective function Protective function: To protect the interest of investors.

The correct option is A
Protective function

Protective function: To protect the interest of investors.