12.5.18 (Criminal Liability for Misstatement in Prospectus )

Where a prospectus contains an untrue statement, every person authorizing its issue is punishable: (i) with imprisonment for a term upto two years or (ii) with fine upto Rs 50,000, or (iii) with both imprisonment and fine. However, an expert is not criminally liable in respect of misstatements in the prospectus.

Liability under s.68. Section 68 provides that any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or by any dishonest concealment of material facts, induces or attempts to induce another person to enter into or to offer to enter into any agreement for, or with a view to acquiring, disposing of, subscribing for, underwriting shares or debentures shall be punishable with imprisonment for a term which may extend to 5 years or with fine which may extend to Rs one lakh or with both.