Sebi today barred two merchant banks and some of their senior executives from taking up new assignments related to public offers,after finding them guilty in irregularities related to IPOs of Taksheel Solutions and RDB Rasayans in 2011.
Sebi also asked the concerned investigation officers to expeditiously complete the probes in the two cases where a number of other entities have also faced penal actions.
The regulator upheld its interim orders passed on December 28,2011 against these entities after giving an opportunity to them to present their case.
Sebi prohibited merchant bank of Taksheel Solutions’ Initial Public Offering(IPO),PNB Investment Services Ltd,and its MD and CEO LP Agarwal from taking fresh assignments.
“…hereby confirm the directions issued vide the ad-interim ex-parte order dated December 28,2011 in the IPO matter of Taksheel Solutions ltd.,against PNB Investment Services Ltd.,Merchant Banker and Shri L.P. Agarwal,” Sebi said.
In addition,Sebi also restrained RDB Rasayan IPO’s merchant bank Chartered Capital and Investment Ltd and its MD Mohib Nomen Khericha and Vice President Manoj Kumar Ramrakhyani from being involved in new public offers from the securities market.
“I am convinced that directions in the interim order in respect of the entities need to be continued…” the Sebi order said in the RDB Rasayans case.
During its probe,the regulator found lack of due diligence on the part of merchant bankers to ensure that RHP and prospectus contained all the disclosures related to these companies.
Sebi’s investigations into RDB Rasayans IPO is primarily focused on disclosures made in the offer documents,the bidding pattern,trading on first day of listing and utilisation of IPO proceeds.
In the case of Hyderabad-based Taksheel Solutions,Sebi found “a part of the proceeds of the issue had been siphoned off in a circuitous route to certain entities and operators,the top net buyers on stock exchanges on the listing day.”
It also observed that the company has hid “vital pieces of information” in its public disclosures and misstated figures. There was a lack of adequate,independent and professional due diligence by the merchant banks,the regulator said.
Polymer manufacturer RDB Raysans Ltd came out with an issue of Rs 35 crore at a price of Rs 79 per share in September 2011,while Taksheel Solutions hit the capital market in October last year aiming to raise Rs 82.50 crore.
The issue price of the shares in the IPO were Rs 150 each.
Earlier this week,Sebi had barred D&A Financial Services and its director Dinesh Kaushik from taking up new assignments related to public offers as they were found guilty in irregularities related to Brooks Laboratories’ IPO.