SEBI for ‘reasonable restrictions’ for ‘tainted’ co IPO

The Securities and Exchange Board of India on Friday passed an order, with regards to issuance of observations on draft offer documents filed with the regulator, in case of an investigation, enquiry, adjudication, prosecution or other regulatory action pending against the company or the promoters. The market regulator said some “reasonable restrictions” would be imposed, if any investigation, enquiry or related issues are pending against the company. In cases where the probable cause of violation has been found, SEBI said, “Observations on draft offer documents filed by the issuer with the board shall be kept in abeyance for a period of 45 days after such probable cause of violation is found or the date of filing of the draft offer document with the Board, whichever is later.” If the show cause notice has been issued, observations on the draft offer documents would be kept in abeyance for 90 days from the show cause notice date or the filing date, whichever is later, according to the order. However, SEBI has said in case the order is not passed within 90 days, it would process the draft offer document for issuance of observations, provided the issuers include the issues in the document and their repercussions. Add Comment