INSUBCONTINENT EXCLUSIVE:
New Delhi: Markets regulator Sebi on Thursday banned Midvalley Entertainment Ltd and its independent directors from the securities market
for seven years for diverting IPO proceeds worth over Rs 50 crore and not making requisite disclosures in the prospectus.
Additionally, four
other officials including the compliance officer and manager of accounts and finance have been barred from the securities market for varying
time periods.
Sebi conducted an investigation between January-February, 2011 to ascertain any irregularities with respect to the initial
public offer (IPO) made by the firm.
It was noted that out of Rs 60 crore of IPO proceeds, the company had utilised only Rs 3 crore towards
the objects of the issue and diverted over Rs 50 crore to its related entities.
Midvalley also failed to make disclosures in the prospectus
regarding directorship of Vasan Chidambaram, independent director, in two other entities.
"By not complying with the regulatory obligation
of making true and complete disclosures, the company and its directors and the signatories to the RHP/Prospectus have misled the investors
which is detrimental to the interest of investors in securities market," Sebi said.
Accordingly, the entities have been restrained from
accessing the securities markets
The senior officials have also been barred from holding any key managerial position during the period of restraint.
In a separate order,
Sebi levied a fine of Rs 15 lakh on VCG - Co and its partner Vishal Chandra Gupta, statutory auditor of Tarini International, for issuing an
unqualified utilisation certificate certifying that the firm had utilised an amount of over Rs 16 crore out of the IPO proceeds for the
proposed objectives of the share sale.
However, the actual utilisation of IPO proceeds was significantly different from the certificate
issued by VCG.
The company had incurred only Rs 211.40 lakh out of IPO proceeds for objects stated in the prospectus as against Rs 1630.98
lakh certified by the statutory auditor, Sebi noted.