Preliminary findings of the SEBI probe revealed that Tijaria Polypipes diverted substantial part of the IPO proceeds, 'through layered transactions', to certain entities
New Delhi: Securities and Exchange Board of India (SEBI) has revoked a ban imposed on two independent directors and a company secretary of Tijaria Polypipes Ltd related to alleged diversion of proceeds from the company's initial public offering (IPO), reports PTI.
The market regulator in December last year had barred Tijaria Polypipes' two independent directors -- Pawan Kumar Jain and Pana Chand Jain -- along with company secretary Tej Kumar Jain from the securities market till further directions.
Revoking the ban, SEBI said that considering various factors, the "benefit of doubt" can be given to the three people.
Preliminary findings of the SEBI probe into the fall in shares of Tijaria Polypipes revealed that the company had diverted substantial part of the IPO proceeds, "through layered transactions", to certain entities.
The IPO, to raise about Rs60 crore, was from 27-29 September 2011.
According to SEBI, Tijaria Polypipes in its prospectus dated 12 September 2011, had declared that it had not raised any bridge loan against the proceeds of the IPO.
However, the company's board, at their meeting in September the same year, had decided to raise Inter Corporate Deposits to meet the working capital requirements while their repayments had to be from the IPO proceeds.
SEBI, in its order, said there is not enough evidence to suggest that the independent directors and company secretary were aware of the board's decisions during the meeting on 10th September.
Taking into consideration the period of prohibition already undergone by the entities vis-a-vis the findings of investigations, SEBI whole time member Prashant Saran said, "I am inclined to give Pawan Kumar Jain, Pana Chand Jain and Tej Kumar Jain the benefit of doubt".
Pawan Kumar Jain resigned from the post of independent director on 5 January 2012, it added.
The ban on the three individuals has been revoked with immediate effect.