SEBI fines six merchant banks Rs.1 crore

The Securities and Exchange Board of India Friday fined six merchant banks Rs.1 crore for violating mandatory disclosure norms of the IPO (initial public offering) documents.

In an order, SEBI stated that while making disclosures in the 'Red Herring Prospectus' the BRLMs (banks and book-running lead managers) cannot pick and choose some material facts that they prefer to disclose and suppress some material facts.

"If material facts are suppressed or distorted as in the extant case, the very safety and integrity of the securities market would become a cause of concern for the regulators and the investors," SEBI said in the order

The IPO under the SEBI order was issued in December 2012, in which merchant banking arms of SBI (State Bank of India), ICICI, Kotak Mahindra, IDBI, DSP Merrill Lynch, and Edelweiss groups have been penalised.