SEBI bans five underwriters

The Securities and Exchange Board of India (Sebi) has banned four Category-I merchant bankers and one broker from doing any underwriting business for a period of two years for not meeting underwriting committments in the 1995 public issue of Ritesh Polysters. The four merchant bankers are First Financial Services, Hindustan Stockland, Marg Securities, Bhagwandas Gordhandas Financial and the broker is SV Vakharia of the Bombay Stock Exchange. The first two entities have been suspended from May 29 and the latter three from June 9. The 1995 issue of Rs 6.890000000 size was not fully subscribed and these underwriters who enter into agreements with companies which float public issues to buy under-subscribed portion of the issues failed to honour their commitments.The suspensions are in terms of sub-regulation (3) of regulation 29 of the Sebi (underwriters) regulations, 1993 for violation of regulation 15(3) read with regulations 25(1)(b), 26(1)(iii)(a) and (ix) of the Sebi (Underwriters) regulations, 1993.Sebi had issued show-cause notices to 130 merchant bankers for failure to meet underwriting commitments last year.