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Markets regulator Sebi on Wednesday imposed a penalty of Rs 10 lakh on Muthoottu Mini Financiers Ltd, a non-banking financial company, for placing misleading advertisements on its website regarding issuance of non-convertible debentures (NCDs).
The company had placed advertisements on its website for public issue of secured, redeemable, NCDs aggregating to Rs 100 crore claiming that the RBI and Sebi have rated its NCD issue as "stable".
"Using the names of the regulators tends to impart a sense of security amongst the investors and thus may lead them to believe that the issue has been rated by the regulators and that, by issuing gives a misleading impression to the public at large," Sebi noted.
By issuing misleading advertisements, the company has contravened provisions of Issue and Listing of Debt Securities Regulations and accordingly monetary penalty has been levied on Muthoottu Mini Financiers.
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