Aizawl, Aug 2 (IANS): Mizoram's Principal Secretary (Industries) C. Lallawmsanga has been suspended for floating a company without the knowledge of the state government, an official said here Friday.

Lallawmsanga is a a 1984 batch Tamil Nadu cadre IPS officer in the rank of additional director general of police.

"An order suspending Lallawmsanga was issued Thursday evening," an official of the Mizoram government told IANS.

"Lallawmsanga, on his personal initiative, launched a company called Mizoram Direct Marketing Limited (MDML) violating government rules and without the knowledge of the state government," the official said on condition of anonymity.

The official said: "MDML was registered under the Companies Act 1956 on March 11 this year. Lallawmsanga, on behalf of the company, signed agreements with Chennai- and Mizoram-based private companies."

According to the official, MDML, a business-cum-finance company functioning like a chit fund group, was branded an undertaking of the Mizoram government.

"It has come under inquiry after it was revealed that the company was institutionalised without the state government knowledge," the official said.

A statement issued by Mizoram Chief Secretary L. Tochhong Thursday said that a policy decision needed to be taken by the state cabinet if government officials were to be allowed to float a business group to conduct commercial activities.

"Besides, floating of a company by government officials required approval from the law, finance and other concerned departments before approaching the registrar of companies," the statement said.

The chief secretary has asked Lallawmsanga not to leave the state without the permission of the state government. "Disciplinary proceedings are being drawn against the official for illegally floating the multi-level marketing company," the statement said.

Other directors of MDML were Teresy Vanlalhruaii and Lalbiakthanga Chhakchhuak, both government officials of different departments, who also face disciplinary proceedings.

An industry department official on condition of anonymity said that several hundred people have enrolled with the MDML by paying Rs.5,000 each as membership fee.