Sebi bars Almondz, senior officials for IPO irregularities

Market watchdog Sebi today barred merchant banker Almondz Global Securities and two of its officials from taking up new assignments related to public offers, after finding them guilty of irregularities related to PG Electroplast's IPO in 2011.
The Securities and Exchange Board of India (Sebi) found that Almondz and its two officials were liable for the lapses in disclosures and misstatement in the IPO prospectus of PG Electroplast.
"It is noted that no proper due diligence was conducted by Almondz and there was total dereliction of duty on its part," Sebi said in its order.
In an order passed by Sebi today, it prohibited Almondz, its MD and CEO Vinay Mehta and Sanjay Dewan, authorised signatory of the investment bank for the due diligence certificate from "taking up any new assignments or involvement in any new issue of capital including an IPO, follow-on issue offer from the securities market in any manner whatsoever for a period of five years."

The regulator said that Mehta and Dewan were also liable for mis-statements and omissions in the IPO prospectus of PG Electroplast.
Also, the regulator said that merchant banker and its officials will not take up any assignment related to buyback as well as deli sting of securities and open offers.

However, Sebi said that the period of ban already undergone by the merchant banker and its officials pursuant to the interim order on December 28, 2011 wherein the entities were restricted from the capital markets "shall be taken into account for the purpose of computing the period of prohibition imposed in this order".

Earlier this month, Sebi had barred PG Electroplast and its promoter-directors from dealing securities as well as raising capital from the stock market for 10 years.
PG Electroplast IPO had opened on September 7, 2011 and closed on September 12, 2011.
The regulator had initiated a probe after it had noticed that the firm's share-price fluctuated within few days of its listing.
Sebi probe had found that PG Electroplast failed to disclose information in the prospectus regarding funds raised through ICDs (Inter Corporate Deposits), purchased orders placed for plant and machinery and that repayment of ICDs would be made from IPO proceeds. It had also diverted the IPO proceeds to entities who had purchased its shares.