No person shall issue, circulate or distribute in India any prospectus offering for subscription in securities of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless before the issue, circulation or distribution of the prospectus in India, a copy thereof certified by the chairperson of the company and two other directors of the company as having been approved by resolution of the managing body has been delivered for registration to the Registrar and the prospectus states on the face of it that a copy has been so delivered, and there is endorsed on or attached to the copy, any consent to the issue of the prospectus required by section 388 and such documents as may be prescribed.
Legal Commentary & Landmark Judgments: Section 389
Section 389 mandates that no person shall issue, circulate, or distribute in India any prospectus offering shares or debentures of a foreign company unless a certified copy has been formally registered with the Registrar of Companies.
In securities litigation or regulatory enforcement, challenge the validity of any foreign private placement or public solicitation that lacked prior registration under Section 389. Seek an interim injunction restraining wire transfers or depository credits, pleading that unregistered distribution constitutes an unlawful offer under the Act.