https://www.taxtmi.com/caselaws?id=467089 Diversion of preferential issue proceeds contrary to disclosed objects, coupled with misleading shareholder communications, constitutes fraud and an unfair trade practice and separately breaches listed-entity disclosure obligations. Interest-free loans to unrelated entities outside the stated issue objects were treated as commercially unsupported diversion. Quarterly and annual deviation disclosures were required but not made. A later shareholder ratification was invalid where notice, publication and e-voting compliance were not substantiated, making the representation of informed shareholder approval false. Audit committee members were not liable because no deviation statement or monitoring report had been placed before them. Monetary penalties applied to the company and a responsible whole-time director, with mitigating factors affecting quantum. en-us Wed, 28 Jun 2023 00:00:00 +0530 Thu, 05 Mar 2026 18:28:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=467089 Diversion of preferential issue proceeds contrary to disclosed objects, coupled with misleading shareholder communications, constitutes fraud and an unfair trade practice and separately breaches listed-entity disclosure obligations. Interest-free loans to unrelated entities outside the stated issue objects were treated as commercially unsupported diversion. Quarterly and annual deviation disclosures were required but not made. A later shareholder ratification was invalid where notice, publication and e-voting compliance were not substantiated, making the representation of informed shareholder approval false. Audit committee members were not liable because no deviation statement or monitoring report had been placed before them. Monetary penalties applied to the company and a responsible whole-time director, with mitigating factors affecting quantum. Case-Laws SEBI Wed, 28 Jun 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=467089