Creating A Real IPO Market

Last week SEBI punished seven companies for malpractices committed during their IPO process. It also took action against the merchant bankers who had managed the issues. These companies have all had their IPOs in recent months. The malpractices took the shape of diversion of the IPO funds. The theme that runs through all these IPOs that they were substantially fraudulent. The promoters fabricated (or hid) information in the prospectuses and they diverted the funds raised for a variety of purposes. SEBI has barred these companies from accessing the securities markets again and also barred the merchant bankers from taking further business. Hopefully, the action won’t stop at just this much. If someone has swindled the public then not being allowed to swindle again does n

This article was originally published on January 02, 2012.