Sebi orders altGraaf and two other platforms to cease operations

Order involves four entities, including two related to altGraaf; action after probe revealed they lack safeguards for investors

The Securities and Exchange Board of India (Sebi) on Monday issued “cease and desist” order against three online bond platforms operating without registration with the stock exchanges.

 

These include altGraaf (AI Growth Private and Texterity Private), Purple Petal Invest, which owns Tap Invest, and Berkelium Technologies, which operates Stable Investments. The order involves four entities, including two related to altGraaf.

 

The regulator has provided a 21-day window for the platforms to file their responses. The examination in the matter is going on.

 

According to the regulatory mandate, online bond platform providers (OBPPs) are required to register with the stock exchanges as stock brokers in the debt segment.

 

 

In its routine inspection, Sebi found several platforms engaging in sale of unlisted non-convertible debentures (NCD) to retail investors.

 

Sebi order notes that these platforms lack safeguards for investors and lapsed on their checks and adherence to investor thresholds prescribed for such issuances.

 

For issuance of securities through private placements, issuers must ensure that they are allotted only to pre-identified investors and adhere to a cap of 200 investors in a financial year. The market regulator further noted that some of the platforms down-sold NCDs to the public while they were the subscribers to the private placement done by the issuers.

 

In the interim ex-parte order, Sebi has pointed out that these platforms appear to have structured their offerings in a manner to avoid regulatory scrutiny.

 

“The distinction between public issues and private placements is not merely procedural, but a fundamental safeguard, ensuring that public investments are protected through rigorous oversight. Allowing such unauthorised platforms to mushroom and operate unchecked would undermine this critical framework and expose the public to significant risk,” noted Ashwani Bhatia, whole-time member, Sebi.

 

More than Rs 4,400 crore has been raised through the altGraaf platform from around 186,000 investors. The platform has onboarded around 75 companies. On the other hand, Tap Invest has onboarded over 100 companies and raised Rs 400 crore through the platform.