sebi:WTM/RKA/SRO/54/2013
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Facts / Headnote
Warning issued to the noticee (Merchant Banker) under section 19 read with section 12(3) of the SEBI Act, 1992 and regulation 28(2) of the SEBI (Intermediaries) Regulations, 2008
Provisions invoked
- s. 19
- s. 12(3)
Regulations
- Reg. 13
- Reg. 28(2)
- Reg. 5
- Reg. 9A
- Reg. 55
- Reg. 60(7)(a)
- Reg. 2(f)
- Reg. 54(1)
- Reg. 5(4)
- Reg. 60(6)
- Reg. 64(4)
- Reg. 55(2)
- Reg. 5(5)
- Reg. 55(1)
- Reg. 67
Parties
- Vivro Financial Services Private Limited
Holding
SEBI warned Vivro Financial Services Private Limited, a Merchant Banker, for failing to exercise due diligence and independent professional judgment in approving the pre-issue advertisement regarding dispatch of CAFs along with ALoFs, in violation of Clause 4 of the Code of Conduct specified in Schedule III read with regulation 13 of the MB Regulations and regulation 64(4) of the ICDR Regulations. The noticee was given benefit of doubt on the charges of not independently assessing the capability of the RTI and not ensuring a legally binding agreement between the issuer and the RTI, and was not held guilty on the remaining charges.
Full text
- 2 - (b) As seen from the statement given by the Managing Director of Knack, the noticee has not even done any in-person verification of the infrastructure and systems of the RTI and has violated the provisions of regulation 5(4) of the ICDR Regulations. (c) The noticee has not exercised due diligence in ensuring that the Company enters into a valid agreement with the RTI and has violated Clause 4 of the Code of Conduct specified in Schedule III read with regulation 13 of the MB Regulations. (d) The noticee had not acted in a prompt and professional manner to ensure that the money for dispatch of CAFs are paid by the issuer to the RTI. (e) The noticee has not ensured and confirmed dispatch of all CAFs by Registered Post / Speed Post by the RTI before advising the Company to publish the pre- issue advertisements. Thus, the noticee has violated the provisions of regulation 54(1) of the ICDR Regulations read with Clauses 8 and 24 of Code of Conduct specified in Schedule III read with regulation 13 of the MB Regulations and regulation 60(6) of the ICDR Regulations. (f) During noticee's meeting with SEBI on December 03, 2010 noticee had insisted on receiving a confirmation letter from the RTI confirming the dispatch of CAFs on November 12, 2010 i.e. before the issue of the advertisement on November 15, 2010, though the noticee had not submitted proof of the confirmation letter. Thus, the noticee has not only failed in its duty as a pre-issue Merchant Banker but also tried to misg
- 3 - Code of Conduct specified in Schedule III read with regulation 13 of the MB Regulations and regulation 64(4) of ICDR Regulations.
- 4 - dated January 07, 2013 for rejection of settlement proposal of the noticee is not correct. The submissions/ reply of the noticee, on merit, are inter alia, as following:
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Source: SecMarx — sebi:WTM/RKA/SRO/54/2013. 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.