sebi:Order/PM/GD/2022-23/16219-16230
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Facts / Headnote
Penalties imposed on multiple Noticees for violations of PFUTP Regulations, SEBI Act, ICDR Regulations and listing agreement; Noticee No. 11 (and Noticee No. 12) held not liable for PFUTP and ICDR violations.
Provisions invoked
- s. 11
- s. 15A
- s. 15
- s. 19
- s. 11(3)
- s. 12A
- s. 15H
- s. 27
- s. 12
- s. 15J
- s. 11C(6)
- s. 21
- s. 23J
- s. 23E
- s. 23
- s. 23A
- s. 151
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(1)
- Reg. 7
- Reg. 200
- Reg. 2
- Reg. 2(c)
- Reg. 3(a)
- Reg. 3(c)
- Reg. 2(1)
- Reg. 57(1)
- Reg. 106P
- Reg. 14(1)
- Reg. 4(2)(c)
- Reg. 2(1)(c)(5)
Holding
The Noticees were found to have violated the PFUTP Regulations, SEBI Act, ICDR Regulations and listing agreement by funding the Esteem IPO through connected entities and diverting IPO proceeds back to those entities, with penalties of Rs. 5,00,000 imposed on several Noticees. Noticee No. 11 was held not liable as he was not involved in day-to-day affairs or decision-making of the Company.
Full text
Adjudication Order in the matter of Esteem Bio Organic Food Processing Ltd. Page 2 of 87 A. BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted an investigation in the matter relating to the IPO of Esteem Bio Organic Food Processing Limited (herein after referred to as Esteem or Company). It was observed that Esteem came out with an Initial Public Offering (IPO) to raise Rs. 1125 Lakh from issue of 45,00,000 equity shares of Rs. 10/- each at an issue price of Rs. 25/- each. The shares were listed on BSE - SME segment on January 07, 2013. The price of the scrip opened at Rs 25.25/- and increased to an intraday high of Rs 26.50/- and closed at Rs 26.50/- on the listing day. The issue size constituted, 30.20% of post issue shares, of Rs.10/- each. Bidding Period of Issue opened on January 18, 2013 and closed on January 22, 2013. During Investigation it was observed that certain entities were connected with Esteem directly/ indirectly and these connected entities had provided funds to the IPO applicants for applying for shares in the IPO of the company.
Adjudication Order in the matter of Esteem Bio Organic Food Processing Ltd. Page 3 of 87 3. Subsequently, vide order dated September 06, 2017, the Confirmatory Orders were revoked with respect to 216 entities out of the total 254 entities (hereinafter referred to as the “Revocation Order”). After the Revocation
Adjudication Order in the matter of Esteem Bio Organic Food Processing Ltd. Page 4 of 87 Particulars Amount (Rs. in lacs) Initial Public Offering 1125.00 Internal Accruals - Total 1125.00 b) Esteem, vide its letter dated 25/12/2015, received by SEBI on 29/01/2015 informed that the utilization of the IPO proceeds as on 31/03/2015 (Rs. in lacs) was as under; Particulars Utilized as on 31/03/2015 (Rs in lacs) Setting up of shade Net cultivation facility 375.00 Development of farm land for transition to organic farming 564.49 Procurement of farm tools and equipments 29.06 Brand Build and General Corporate Purpose 30.00 Issue Expenses 31.28 Investment in short term, advances 99.67 Total 1129.50
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Source: SecMarx — sebi:Order/PM/GD/2022-23/16219-16230. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.