Restrictions on allotment of shares by pvt ltd co

Hi Friends, A Private Limited Company has taken a Secured Loan from a Financial Institution and form 8 is filed. Now the Financial Institution is insisting on becoming a member in the company... My doubt is whether a Private Limited Company can Allot or say even Transfer atleast One Share to the Financial Institution ? Will it become a Deemed Public company due to this .... Or will it attract any other violation ... Thanks ......