RDB Rasayan IPO: Sebi slaps Rs 20 lakh on 1 individuals

Sebi today slapped a penalty of Rs 20 lakh on Chartered Capital and Investment's MD Mohib Noman Khericha and Vice President Manoj Kumar Ramrakhyani for failing to carry out their duties as merchant banker with due diligence in the initial public offering (IPO) of RDB Rasayans.
The market watchdog has imposed "a penalty of Rs 10 lakh each" on Chartered Capital's Managing Director Mohib Noman Khericha and Vice President & Compliance Officer Manoj Kumar Ramrakhyani after observing several irregularities in their role as as Book Running Lead Manager in the IPO of RDB Rasayans.
According to the Securities and Exchange Board of India (Sebi), Khericha and Ramrakhyani had failed to disclose about the Rs 7.28 crore inter corporate loans given to RDB Rasayans in the firm's prospectus, update the offer document regarding the company's board meeting held on September 12, 2011 as well as point out to the company to obtain updated quotations with regard to plant and machinery.

As per norms, the lead merchant bankers have to exercise due diligence and satisfy themselves about all the aspects of the issue, including the veracity and adequacy of disclosure in the offer documents. However, Khericha and Ramrakhyani failed to comply with these regulations, Sebi said.
Sebi had conducted an investigation of the RDB Rasayans IPO and subsequent trading on and around the listing days as the firm's scrip witnessed wide fluctuations in the price on the BSE.
The company had opened its public issue of 45 lakh shares September 21, 2011 and had closed it on September 23, 2011.