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12. Radiant Pharma Limited is a public company. Three of its major shareholders Mr. Kabir, Ms. Leela, and Sunrise Holdings Pvt. Ltd., collectively…

CA Intermediate · Corporate and Other Laws · MTP · September 2026

12. Radiant Pharma Limited is a public company. Three of its major shareholders Mr. Kabir, Ms. Leela, and Sunrise Holdings Pvt. Ltd., collectively holding 40% of the company's paid-up equity share capital, decide to offer their entire shareholding for sale to the public through an offer document, in consultation with the company's Board. The offer document is issued by these three shareholders (and not by the company itself), inviting the public to purchase their shares. A shareholder who subscribed to the shares through this offer document later discovers certain material misstatements in it, and wishes to know against whom he can proceed for misrepresentation, since the document was technically not issued by the company but by the selling shareholders. Which of the following best explains the legal position under Section 28 of the Companies Act, 2013?

(A) (a) No liability can arise, as an offer for sale by shareholders is a private arrangement between the selling shareholders and the purchasing public, entirely outside the scope of the Companies Act, 2013.

(B) (b) The document, though issued by Mr. Kabir, Ms. Leela, and Sunrise Holdings Pvt. Ltd., shall be deemed to be a prospectus issued by the company, and all provisions of the Act applicable to prospectuses including liability for mis-statements shall apply as if it were a prospectus issued by the company itself.

(C) (c) The offer document is valid only if it is first approved and countersigned by the Registrar of Companies without such approval, the offer for sale is void ab initio and no liability provisions apply.

(D) (d) Since the shares were already issued and merely being resold, Section 28 has no application at all, and the transaction is governed exclusively by the SEBI (ICDR) Regulations, with no recourse under the Companies Act, 2013.

12. Radiant Pharma Limited is a public company. Three of its major shareholders Mr. Kabir, Ms. Leela, and Sunrise Holdings Pvt. Ltd., collectively…

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