The Securities and Exchange Board of India (Sebi) has directed companies preparing for public offerings to disclose any complaints received from whistleblowers, company insiders, or anonymous sources, especially those related to the company's promoters, after submitting their draft offer documents for initial public offerings (IPOs), according to a report by Moneycontrol.
This development comes as Sebi makes a rare intervention in halting the IPOs of two companies in recent months due to whistleblower complaints about insufficient or misleading disclosures in their offer documents. Sebi has recently reviewed allegations of fraud and incomplete disclosures against two small and medium-sized enterprises (SMEs) that were looking to go public.
Rosmerta Digital Services calls off IPO
One such company, Rosmerta Digital Services, had planned to launch its Rs 206-crore IPO in mid-November last year, aiming to become the largest SME fundraise. However, after Sebi received several whistleblower complaints regarding the promoters’ associates’ alleged violations of securities market regulations and concerns about incomplete disclosures, the company decided to postpone its IPO indefinitely, the report said.
In another case, Sebi took action against Trafiksol, an SME that had completed its IPO, after receiving a whistleblower complaint about misstatements in the company’s offer documents and potential collusion with a shell entity. Sebi instructed Trafiksol to refund investors' money...
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