WIDER CONSTRUCTION OF IPO OBJECTS – NOT A VALID DEFENCE AGAINST DIVERSION OF IPO PROCEEDS
INTRODUCTION : The Securities and Exchange Board of India (hereinafter “SEBI” ) vide order dated 23 rd October 2020 debarred Birla Pacific Medspa Ltd. (hereinafter “the Company” ), its Directors and key managerial personnel (hereinafter collectively referred to as “the Noticees”) from accessing the securities market and dealing in securities directly or indirectly for a period of two years in connection with diversion, misutilisation and siphoning of funds raised through Initial Public Offer (“ IPO ”). This comes at the backdrop of the investigation by SEBI conducted during the period July 07, 2011 to July 15, 2011 (hereinafter “Investigation Period” ). It is an undisputed fact that investors and other stakeholders seek to channelize their funds in entities that throng and promote good governance practices not only in letter but in the spirit of law and the recent ruling by SEBI in case of the Noticees deploy one more reason to look back at the lacuna in corporate governance. Th...