INSUBCONTINENT EXCLUSIVE:
New Delhi: Securities Appellate Tribunal on Thursday reduced the market ban period on Inventure Growth and Securities to three years as well
as set aside restrictions on certain directors of the company in a matter related to furnishing of false information in IPO documents.
In
August, Sebi had barred the company and all its directors from the securities market for four years.
Now, the tribunal has done away with
the restrictions that were imposed by Sebi on non-executive and independent directors, saying they were not involved in the day-to-day
management and control of the company.
For chairman and managing director as well as executive directors and whole-time director during the
period when the violations happened, the tribunal has eased the restrictions
They have now been barred only from associating themselves with any listed company or partners in a partnership firm.
They have been
restrained from holding any fresh position for three years starting from January 1, 2019.
Besides, the market ban on the company has been
reduced to three years from four years.
Markets regulator in an order passed in August 2019 barred the firm and the officials from the
securities markets for a period of four years for concealing "material information" and making false and inadequate disclosures in the
initial public offer (IPO) documents.
Also, Sebi found that the firm had misutilised the proceeds received from the initial share-sale by
applying them towards activities not disclosed in the prospectus and made false statements in its prospectus with respect to raising bridge
loans and other financial arrangements.
The officials were banned for giving a wrong certificate in the prospectus and thereby were held
responsible for concealing material information.
The company and its officials violated issue of capital and disclosure requirements (ICDR)
regulations, Sebi said.
While taking cognizance of the issue of raising bridge loan, SAT said "in the prospectus it was positively declared
that the company has not raised any bridge loan
Thus on this count it can clearly be declared that a false/wrong declaration was made in the prospectus in violation of ICDR
Regulations."
Besides, the tribunal held that "the company failed to disclose the deposits in the prospectus and, therefore, violated the
Regulation."
However, regarding non utilization of the IPO proceeds towards the stated object, SAT in its order said "the charge that the
company has misutilised part of the fund by failing to appropriate the necessary amount towards money advanced by its subsidiaries
specifically cannot be sustained."
Accordingly, the tribunal has reduced the period of restraint on the firm from four years to three