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Anand Rathi faces Rs 5 lakh fine by Sebi in Datsons IPO case

Anand Rathi, which was one of a merchant banker, had failed to make disclosure of advancement of the loan by ARSBL to Datsons in the IPO document, the regulator noted.


PTI Last Updated at 31 Jul 2018, 17:07 IST India

Markets regulator Sebi today imposed a fine of Rs 5 lakh on merchant banker Anand Rathi Advisors for not making a disclosure about the advancement of the loan by a group firm, in the IPO documents of Dr. Datsons Labs.

The Securities and Exchange Board of India (Sebi) conducted an investigation in the matter of initial public offer (IPO) by Datsons (formerly known as Aanjaneya Lifecare) during the period of May-June 2011 to ascertain any possible violation regulations.

The company came out with an initial share-sale in May 2011 to raise Rs 117 crore.

Pursuant to the investigation, Sebi found that ARSBL, a group company of Datsons on March 31, 2011, had advanced Rs 2 crore as inter-corporate deposits (ICD) to the issuer company, which was later repaid from the IPO proceeds on May 26, 2011.

Anand Rathi, which was one of a merchant banker, had failed to make disclosure of advancement of the loan by ARSBL to Datsons in the IPO document, the regulator noted.

"The failure of the notice (Anand Rathi) on its part in ascertaining the advancement of loans by its group company, which was a material information, was not disclosed in the offer document in respect of IPO by Datsons and therefore the conduct of the notice cannot be viewed leniently," Sebi said.

Lapses on the part of Anand Rathi is in violation of the code of conduct for merchant bankers and accordingly, the regulator has imposed a fine of Rs 5 lakh on it.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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