The regulator alleged that the corporate made deceptive statements within the prospectus in respect of objects of the IPO, diverted the IPO proceeds by giving it to 3rd events below the pretext of labor contract, gave ICDs (inter- company deposits) to group firms and channelled IPO funds by means of intermediate entities for supporting the value of its personal scrip on the itemizing day.
Sebi alleged IPO proceeds price Rs 14 crore have been diverted and mis-utilised by the corporate to assist the value of its personal shares on the itemizing day.The proceeds have been channeled by means of two layers of entities.
In its present trigger discover to the corporate, the regulator additional alleged that IPO proceeds price Rs 33.four crore have been disbursed to sure entities below the pretext of advances towards work contracts for IPO goals.
“But in fact, no substantial work contracts were executed, rather the funds disbursed remained unreturned to BPML and thus it is alleged that the said proceeds were misutilized and siphoned off,” Sebi mentioned in its order on Friday.
The regulator mentioned proceeds of IPO price about Rs 31 crore have been disbursed to group firms as ICDs, which was in stark distinction to the objects of IPO or the interim use of funds as said within the prospectus.
“The Prospectus permitted interim deployment of proceeds as investment in liquid instruments only and did not permit such deployment of funds as ICDs.Thus, it is alleged that the act of approving the deployment of funds as ICDs in the board meeting dated July 11, 2011, tantamounted to mis-statement in Prospectus and diversion and misutilization of IPO proceeds,” Sebi mentioned.
Officials on the firm couldn’t be instantly reached for his or her feedback.