Markets regulator Sebi on Friday slapped a total penalty of Rs 1.81 crore on stock broker Inventure Growth and Securities Ltd and its twelve officials for failing to utilise the initial public offering (IPO) proceeds for purposes as stated in the prospectus.
Sebi conducted an investigation in the IPO of equity shares by the stock broker between August 4, 2011, and August 11, 2011.
The investigation revealed that the stock broker "failed to utilize the IPO proceeds for the purpose as stated in the prospectus, made false statements with regard to raising bridge loans and failed to make disclosures regarding acceptance of deposits under...of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975, in its RHP and Prospectus."
Inventure Growth and Securities Ltd (IGSL) in its prospectus made a statement that it has not raised any bridge loan. However, it was observed that there were certain transactions entered into by the company, which were found to be in the nature of bridge loans.
Further, the regulator also found that "the signatories to the prospectus made untrue statement regarding availing of bridge loans and acceptance of deposits by IGSL."
"True and fair disclosures are important in an IPO as the investors rely on the statements and disclosures made by the issuer company while making investment decisions. If the disclosures made by the company/promoter and director later found to be factually incorrect, it will impact the interest of investors, which in turn mislead the investors," Sebi said.
The acts of the firm and its officials are in violation of various market norms including Issue of Capital and Disclosure Requirements Regulations and Prohibition of Fraudulent and Unfair Trade Practices Regulations.
Accordingly, a total fine of Rs 75 lakh has been imposed on the firm.
Officials of the firm -- Nagji Keshavji Rita, Virendra Dudhnath Singh, Kanji Bhachubhai Rita, Vinod Kanji Shah, Pravin Nanji Gala, Arun Narayan Joshi, Jambunathan Srinivasaiyer, Harshavardhan M Gajbhiye, Ajay Khera, Deepak M Vaishnav, Arvind Jethlal Gala and Bhavi Rahul Gandhi -- have been fined in the range of Rs 3 lakh to Rs 15 lakh each.
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