Sebi bans First Overseas Capital for 2 years, imposes ₹20 lakh penalty

The Securities and Exchange Board of India (Sebi) on Thursday barred investment banking outfit First Overseas Capital from dealing in the securities market for two years and imposed a fine of Rs 20 lakh for alleged violations.

 

The i-banker has also been banned from taking any new mandate for IPOs, arrangements, or corporate advisory for two years.

 

The market regulator has alleged that the i-banker’s total underwriting obligations were more than the specified limit of 20 times at multiple points in time and that it accepted public deposits to fulfil its underwriting obligations.

 

It even submitted false and misleading information to Sebi and is alleged to have indulged in business other than that of the securities market. The order also points to violations on account of failure to intimate Sebi about acquisitions of securities of companies whose issues were managed by it, lapses in maintaining adequate net worth, and failure to submit half-yearly reports, along with several other violations. 

The final order highlights that First Overseas Capital submitted incorrect information regarding the IPOs managed by it, details of the compliance officer, and indulged in the property development business.

 

Sebi Whole-time Member Amarjeet Singh noted in the order that such acts on a repeated basis by a registered entity are not in “good faith” and “reek of mala fide.”

 

In an interim order in October 2024, Sebi had banned the merchant banker from taking any new mandate of issue management or acting as manager.