Allotment of shares of Public Issue to be Listed ‑ Despatch of refund orders to applicants against public issue of share capital ‑ Instructions to act upon complaints regarding non‑refund - Companies Law - Circular : No. 4

Circular : No. 4[10/1/88 ‑ CL ‑ V], dated 8 ‑ 2 ‑ 1988. Subject:- Allotment of shares of Public Issue to be Listed ‑ Despatch of refund orders to applicants against public issue of share capital ‑ Instructions to act upon complaints regarding non ‑ refund 1. I am directed to invite your attention to the provisions of section 73 of the Companies Act, 1956, which makes it obligatory upon companies to refund application monies to the applicants, after public issue, within 10 weeks from the close of the subscription list and to enclose herewith a copy each of Circular No. F. 1/63/SE/87, dated 8‑1‑1988 and Press Note dated 8‑1-1988, issued by the Ministry of Finance, Department of Economic Affairs (Stock Exchange Division), for information. 2. In order to safeguard the interests of the investors, you are requested to get in touch with the concerned Stock Exchange(s) to ensure that the complaints regarding non‑refund of monies are promptly attended to and the delinquent companies are called upon to repay money with interest at the rate of 12 per cent per annum from the expiry of the 8th day after 10 weeks from the close of the subscription list. In case, the companies fail to pay interest, in terms of the provisions of section 73, in appropriate cases, you may file prosecution after issuing a show‑cause notice to the directors concerned. In this regard, you may consider the report sent by Stock Exchanges to you, in terms of paragraph 6 of the Circular dated 8‑1‑1988 issued by the Ministry of Finance to Stock Exchanges. If necessary, you may cause inspection of the records of the company to ensure that the company concerned has duly complied with the provisions of section 73. Needless to say, this requires your personal attention, when you receive complaints from the investing public, after the prospectus is filed with you. 3. You may send a report to this Department after three months of the close of the subscription list in respect of prospectus filed by a company in your office, indicating, inter alia, the nature of complaints/No. of complaints received by you relating to the contravention of section 73 and the action taken by you in the matter.