SEBI orders Online Capital Advisors to return Rs35 crore diverted from IPO proceeds

The Securities and Exchanges Board of India (SEBI) has passes an order directing Onelife Capital Advisors Ltd and its promoters to bring back diverted IPO proceeds of Rs35.25 crore.

The order, passed on 30 August 2013, directs Onelife Capital Advisors Ltd and its managing director Pandoo P Naig to bring Rs35.25 crore diverted IPO proceeds into the company from Fincare, Precise and KPT within six months from the date of this order.

SEBI has directed the board of directors of the company to ensure compliance of its direction and submit a monthly progress report on the matter and a compliance report duly certified by a SEBI-registered merchant banker within two weeks of compliance of the direction.

The market regulator has prohibited Pandoo P Naig, managing director of the company, from accessing the securities market and buying, selling and otherwise dealing in securities market, directly or indirectly, in whatsoever manner, for a period of 3 years from the date of the interim order.

Onelife Capital Advisors Limited (OCAL) came out with an initial public offer (IPO) of its shares to raise Rs36,85,00,000 through issue of 33,50,000 equity shares of Rs10 each with premium of Rs100. The IPO was subscribed to the extent of 1.53 times. Within short span of time after closure of the issue OCAL fraudulently diverted Rs35.25 crore to three entities, viz, Fincare Financial and Consultancy Services Private Limited, Precise Consulting & Engineering Private Limited and KPT Infotech Ltd, which were found to be acting hand in glove with the issuer for the purposes other than objects of the IPO.

SEBI said this is the first of various IPOs in which it recently started probe. SEBI has established fraudulent diversion of IPO proceeds as a securities market related fraud in this case.