Issuing undated and unsigned circular by stock broker containing statements contrary to terms of sanction by Controller of Capital Issues ‑ Whether attracts penal provisions - Companies Law - No. F. 2/10/730/64,

Circular : No. F. 2/10/730/64, dated 22 ‑ 9 ‑ 1954. Subject:- Issuing undated and unsigned circular by stock broker containing statements contrary to terms of sanction by Controller of Capital Issues ‑ Whether attracts penal provisions Recently it came to the notice of the Government that a firm of stock brokers, who were acting as underwriters to the issue of capital by a company, had issued an undated and unsigned circular which contained statements which materially differed and were contrary to the terms under which the issue was sanctioned by the Controller of Capital Issues. This action on the part of the firm was also within the mischief of the penal provisions of the Companies Act relating to the offer and sale of shares. The Government desires to observe that the stock brokers with their specialised knowledge of company matters are expected to maintain a strict code of conduct. In the above case, it was not considered necessary to pursue the matter further but it is hoped that in future stock exchanges will be more alert and take firm action should such instances recur.