Solution in sight for Sebi-Vaswani Industries spat

The SEBI order had called this a rare and peculiar case where SEBI detected prima facie indications of a concerted effort by brokers as well as investors to allegedly inflate the bid book and induce investors.

There were also several complaints from investors of subscription irregularities relating to huge withdrawals and rejections after the IPO closure. SEBI then directed Vaswani Industries to provide withdrawal option in both the categories — HNIs and retail investors and also significantly, told the stock exchanges to withhold the listing of the company following future instructions.

Vaswani Industries moved the Securities Appellate Tribunal (SAT), asking them to vacate the SEBI order because they alleged that while the SEBI order violates the Companies Act.

The latest twist in this case is that both the parties are looking at an amicable solution which might be completed in the next few weeks. They have sought time for this particular settlement from the SAT. August 23, is the next date to look out for a settlement, which will send strong signals to both the investor community as well as the broker’s community, in relation to alleged malpractices in IPOs.