MCA fines Growpital ₹1.48 cr for marketing unlisted securities on social media
₹1.48 crore for violating Companies Act, 2013 by marketing unlisted non-convertible debentures (NCDs) on social media. The ministry order was issued on 3 June, months after Sebi barred the company from the securities market pending an investigation into allegations that it made money through unauthorised investment schemes. The fine was issued under Section 42(7) of the Companies Act, 2013, which says, “No company issuing securities under this section (read: unlisted securities) shall release any public advertisement or use any media, marketing or distribution channels or agents to inform the public at large about such an issue." Founded by Rituraj Sharma and Krishnna Joshi, Growpital’s business model was straightforward: pool money from retail investors into a limited liability partnership (LLP) company they operated, use that money to lease agricultural land and engage in farming, and give investors the tax-free returns they were promised.
The company advertised guaranteed tax-free returns as high as 20% for some deals. Also read: Agri-investment comes with risks. Look at Growpital MCA said Growpital had issued unlisted non-convertible debentures (NCDs) totalling ₹1.47 crore to 183 holders with an interest rate of 19% a year.
It used fundraising platform Tyke Invest to issue these NCDs. According to the MCA order, Tyke conducted an online 'ask-me-anything' (AMA) session on YouTube, during which Rituraj Sharma presented the company's background, services, performance, and growth opportunities, in violation of Section 42(7). Tyke has since made the video private.
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