Mundra port IPO papers put on hold

The Securities & Exchange Board of India (Sebi), the stock market regulator, has put in abeyance for 90 days the draft prospectus of Mundra Port and SEZ, promoted by the Adani group, as the promoters face prosecution in a Mumbai court over allegations of share price rigging in the 2002 stock scam involving rogue trader Ketan Parekh.

In a reply to a query by Business Standard, the Sebi said: "The draft offer document of the company has been filed on March 6 and the period of 90 days expires on June 4 till which time the Sebi is obligated to keep in abeyance issuance of observations on the offer document."

According to the disclosures made in the document, show-cause notices have been issued by the Sebi to the promoters. "Hence, in terms of the general order passed under Section 11A of the Sebi Act, 1992, an interim or final order on the SCNs issued has to be passed within 90 days from the date of the general order or filing of the draft offer document, whichever is later," the Sebi said.

Sebi insiders say they are studying the legal implications of the IPO and are going through the disclosures made by the company. "They have filed the prospectus and we are looking at all the angles," a Sebi official said. Mundra Port and SEZ Ltd's executive-director Ameet Desai said the draft prospectus was filed in line with the Sebi's December 2006 circular that said a company that had received Sebi's show-cause notice could file the draft prospectus.