Cracking whip against seven firms for not complying with the disclosure norms in their IPO prospectus, Sebi on Tuesday barred the companies, their directors, merchant bankers and other related entities from participating in the securities market till further order.
The merchant bankers who have been prohibited from participating securities market, include "PNB Investment Services, the book running lead manager of IPO of Taksheel Solutions and Almondz Global Securities (PG Electroplast and Bhartiya Global Infomedia)". Their CEOs too have been barred from participating in the capital market till further order.
"... by not complying with the regulatory obligation of making the disclosures, the Company and its Directors had not provided the vital information which is detrimental to the interest of investors in securities market," Sebi order against Taksheel Solutions said.
It said that proceeds of IPO invested by the company in the India bulls Mutual Fund- Liquid Fund (amounting to Rs 5 crore) in an escrow account, till further directions.
"Taksheel Solutions is prohibited from raising any further capital, in any manner whatsoever, till further directions," it added.
Similar orders were passed against the other six firms.
The market regulator has asked them to deposit the proceeds from the IPOs in escrow bank accounts and also call back the IPO proceeds to their cash credit accounts.
Talking about the importance of lead book running mangers in an IPO, Sebi said if the merchant banker fails to act diligently and comply strictly with the letter and spirit of the regulations, the investors are put to grave danger, which may not be in the interest of the capital market.
"This is precisely what has happened in this (Taksheel) particular issue where lack of adequate and independent due diligence by the merchant banker has resulted into shenanigans on the part of the company and its promoters/ directors," the Sebi order said.
In its order against Tijaria Polypipes, the Sebi said "the fraudulent, abusive, manipulative and illegal activities committed by the company Tijaria Polypipes and certain entities/persons to the detriment of the genuine investors and adversely affecting the integrity of securities market...SEBI as a Regulator should immediately intervene...to stop further harm to investors...".
The other companies against which orders were passed, include, Bhartiya Global Infomedia, RDB Rasayans, Brooks Laboratories and PG Electroplast. Similar order too has been passed against Onelife Capital Advisors.