Legal Troubles Mount for Vikas Garg: Delhi Court Halts Advik Laboratories’ Rights Issue Amid Growing Regulatory Scrutiny

NEW DELHI — In a major setback for corporate promoter Vikas Garg, the District Judge at Patiala House Courts has issued an ad-interim ex-parte injunction restraining Advik Laboratories Limited from proceeding with its proposed rights issue. The court order halts the company’s capital-raising plans just as a broader pattern of legal, criminal, and regulatory challenges intensifies around Garg’s business operations.

The injunction, arising from a lawsuit filed by Fairplan Distributors Pvt. Ltd.—a substantial minority shareholder holding 23.46% of the equity capital—effectively freezes all operations related to the rights issue. The plaintiff has alleged deep-seated issues within the management, specifically pointing to fraud, siphoning of funds, and severe corporate mismanagement.

Scope of the Court’s Restraining Order

The Patiala House Court has explicitly prohibited Advik Laboratories from taking any further steps to mobilize capital under the current scheme, specifically restraining it from:

* Filing the official Letter of Offer with the Securities and Exchange Board of India (SEBI);

* Dispatching any offer documentation or prospectus to existing shareholders;

* Opening the public or private subscription window;

* Receiving any subscription monies or processing shareholder capital; and

* Allotting shares under the proposed rights issue.

The plaintiff highlighted that this marked the fourth attempt by management to raise capital through rights issues in a brief four-year span, drawing suspicion given the escalating complaints filed across various corporate and judicial forums. While the court noted that these are preliminary findings and the defendants—including Vikas Garg—will have an opportunity to present their defense on August 22, 2026, the freeze deals an immediate blow to the company’s liquidity plans.

A Growing Matrix of Adverse Legal Challenges

The latest injunction against Advik Laboratories is not an isolated event for Vikas Garg, who is currently navigating a wave of civil and criminal investigations into his market conduct and corporate governance across multiple ventures:

Alleged Share Misappropriation & Police Scrutiny (2025): Earlier, the Patiala House Court directed the Delhi Police to submit an Action Taken Report (ATR) following criminal complaints lodged by GTM Builders. The complaint accuses Garg and associates of criminal conspiracy, cheating, and forgery involving the allegedly unauthorized and fraudulent transfer of equity shares following corporate merger processes.

SEBI Market Penalties:Capital market regulator SEBI previously cracked down on Garg and fellow promoter-directors of sister concern Advik Capital Ltd. SEBI levied penal fines after investigations revealed severe delays and systemic non-compliance with the Substantial Acquisition of Shares and Takeovers (SAST) Regulations, noting delayed disclosures on breach of critical shareholding thresholds ranging up to 234 days.

CBI and Media Revelations: Beyond regulatory compliance, Garg has faced intense scrutiny over past professional conduct, including charges framed in a Special CBI Court regarding financial due diligence irregularities, alongside recent investigative broadcast reports probing alleged networks of shell entities and fabricated billing mechanisms designed to exploit tax departments.

With capital avenues effectively frozen by judicial intervention and multiple regulatory bodies examining transactions across his corporate network, the upcoming August court hearing is expected to draw heavy scrutiny from institutional investors and market watchdogs alike.