SAT quashes Sebi ban on Yash Birla, others

MUMBAI: The Securities Appellate Tribunal (SAT) has quashed a Sebi order that had barred Yashovardhan Birla and others from the securities market for two years for alleged mis-utilisation of the IPO proceeds. The Sebi, in October 2020, restrained Birla Pacific Medspa Ltd, Yashovardhan Birla and eight others from the securities market for two years for misutilisation of the IPO proceeds.

Birla Pacific Medspa Ltd (BPML), which came out with offer documents in March 2011, had floated its over Rs 65-core initial public offering (IPO) in June 2011.

The regulator, in its order, said that the company made misstatements in the prospectus in respect of the objects of the IPO.

Pursuant to Sebi's order, Yashovardhan Birla and other individuals moved SAT. These individuals were the signatories to the prospectus of Birla Pacific Medspa. In its order dated August 26, the SAT said that appellants did not make any misstatement in the prospectus.

It, further, said that the finding given by the Sebi that there is a misstatement in the prospectus which was done deliberately from the very inception in order to misuse the IPO proceeds and divert the proceeds through inter-corporate deposits (ICDs) to group companies is "perverse and based on surmises and conjectures which a prudent person cannot arrive at".

If the IPO proceeds were not utilised in the manner stated in the prospectus it does mean that the subsequent action taken by the company indicates that there was a misstatement in the prospectus, the tribunal noted.