Sebi today barred Almondz Global Securities and its two executives for six months from the capital market for violating laws.
The case relates to Bharatiya Global Infomedia Ltd (BGIL) using the proceeds from its initial public offer in a substantially different manner from the purposed disclosed in the Red Herring Prospectus.
Sebi had found that Almondz, as the Book Running Lead Manager, in the IPO prima facie failed to exercise the required due diligence and have aided and abetted the fraud committed by BGIL and its directors/officials.
Almondz, Vinay Mehta and Sanjay Dewan are prohibited "from taking up any new assignment or involvement in any new issue of capital including IPO, follow-on issue, etc in the securities market in any manner whatsoever for a further period of six months from the date of this order," Securities and Exchange Board of India (Sebi) said.
Mehta is the Managing Director and CEO, and Sanjay Dewan is the Head of Merchant Banking Division of Almondz.
Among others, Almondz has been found in violation of regulations related to prohibition of unfair trade practices and merchant bankers.
The decision to prohibit these entities from the capital market was taken after "considering facts and circumstances of this case, particularly the degree of negligence of Almondz as found in this case, interest of investors and the integrity of the securities market," according to the order.
They have been prohibited for six months from taking up any assignment or involvement in buy-back, open offers and delisting of securities under Sebi regulations.
The order noted that Almondz did not employ reasonable skill and care and failed to verify the veracity and adequacy of the disclosures.
It also said that due diligence certificate given by Almondz while filing the draft Red Herring Prospectus (RHP) with Sebi was not true.
