New Delhi, October 8, 2024: In a major setback for real estate developers Omaxe Group, BPTP Limited, and Parsvnath Developers, the Securities Appellate Tribunal (SAT) has upheld the Securities and Exchange Board of India’s (SEBI) order banning them from the securities market.
The SAT dismissed the appeals filed by these companies against SEBI’s order, which was issued in 2021. SEBI had accused the developers of misappropriating funds raised through initial public offerings (IPOs) and failing to comply with regulatory requirements.
The SAT found that the developers had indeed violated SEBI regulations and had used the IPO proceeds for purposes other than those disclosed in the offer documents. The tribunal also noted that the developers had failed to provide adequate information to investors, leading to significant losses.
The ban imposed by SEBI prohibits the developers from issuing securities, trading in securities, or associating with any listed company. The order also bars their directors and key personnel from holding any positions in listed companies.
The SAT’s decision is a significant blow to the developers, who have been struggling to recover from the financial crisis that led to SEBI’s action. The ban is likely to further limit their ability to raise capital and expand their operations.
The case has implications for other real estate developers in India, as it highlights the importance of adhering to SEBI regulations and providing accurate information to investors. The SAT’s decision sends a strong message that the regulator will not tolerate any wrongdoing by listed companies.
