Companies face one-year ban for rejected IPO papers
24 Aug 2012
Companies whose IPO documents have been rejected by market regulator Securities and Exchange Board of India (SEBI) will not be allowed to access the capital market for at least one year thereafter. Managers to such public issues would also face penal action, SEBI said on Thursday.
SEBI will also make public details of such companies and their issue managers, along with the reasons for rejection.
This is part of the measures announced by SEBI chairman U K Sinha to safeguard the interest of investors.
Sinha had, after SEBI's last board meeting on 16 August, had announced plans to detail criteria for rejection of IPO documents in order to safeguard the interest of investors.
The measures have been finalised in consultation with its Primary Market Advisory Committee (PMAC), the companies and the book-running lead managers.
Companies whose offer documents are rejected would not be allowed to access capital markets for at least one year. The amount may be increased depending upon the materiality of the omissions and commissions.
