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Journalism of Courage
The Securities and Exchange Board of India (Sebi) has put more responsibility on merchant bankers while dealing with complaints relating to IPO documents. It has asked the merchant bankers to respond to any complaints regarding an offer document directly after independently examining the matter, instead of the issuer company coming out with explanations. In a notification, Sebi advised the merchant bankers to refrain from the current practice of forwarding issuer company’ responses without comments from lead managers. “Merchant bankers shall respond to the complainant directly after independently examining the matter and exercising the due diligence,” the regulator said in a notification.
In the event the complaint has resulted in pointing out inadequate disclosure in the offer document, merchant bankers would provide adequate disclosure and inform Sebi at the earliest, the notification added. In such informations to Sebi, merchant bankers should state that that clarifications of the issuer company are satisfactory. Further, all relevant disclosures have to be made which must be in compliance with the Sebi (DIP) guidelines.
