Sebi imposes two-year ban on individuals for irregularities in Timbor Home IPO

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December 16, 2020 4:56 PM

Sebi has barred two individuals from accessing the securities market for two years for irregularities in the IPO of Timbor Home Ltd (THL) back in 2011.

Sebi, Securities and Exchange Board of India , insider trading, digital databaseSebi said Maloo and Patel were the managing director and whole time director of THL, respectively, during the period of IPO and also signed the prospectus.

Sebi has barred two individuals from accessing the securities market for two years for irregularities in the IPO of Timbor Home Ltd (THL) back in 2011. The individuals — Anant Sureshchandra Maloo and Manan Vidhyapati Patel — were the directors of the company during the period of Initial Public Offer (IPO). The regulator had conducted an investigation for the period of June 22 to July 8, 2011 into the scrip of Timbor Home Ltd. The company came out with its IPO in 2011.

According to Sebi, the company had failed to disclose its pre-existing liabilities amounting to around Rs 7 crore related to working capital expenses in the Red Herring Prospectus and on the contrary, it made an affirmative disclosure that there is no pre-existing liability related to working capital expenses. Further, it was revealed that the company had failed to disclose about an amount of Rs 7 crore which was in the nature of a bridge loan. However, the company had made an affirmative disclosure that it has not raised any bridge loan against the proceeds of the IPO.

As per an order passed on Tuesday, the company had also inflated its purchases and sales figures for the years 2010-11 and 2011-12, which included the financial information contained in the prospectus. THL made a misstatement in the quarterly statement to the exchange regarding utilisation of IPO proceeds for the quarter ended December 2013, which is a violation of Sebi norms, the order noted.

Currently, the company is under liquidation. Sebi said Maloo and Patel were the managing director and whole time director of THL, respectively, during the period of IPO and also signed the prospectus. Thus, they are liable for the violations of the regulations, Sebi said, adding that they have been restrained from the securities market as well as acting as a director in any listed company for two years.

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