Company’s IPO prospectus says it cannot compare the promise and performance of Galaxy Entertainment because it does not have the IPO records of Galaxy which are legal documents. Still, SEBI has cleared the Future Ventures’ prospectus, unaware of the irony

Future Ventures India Limited, the Kishore Biyani-promoted investment company, recently announced an initial public offering (IPO) to raise Rs750 crore.

One of its group companies is Galaxy Entertainment Corporation, which was listed on the Bombay Stock Exchange, before Future Ventures acquired it three years ago. But the prospectus for the current IPO planned by Future Ventures says that it does not have any access to information about the promise and performance of this company.

Galaxy was promoted by Purnendu Chatterjee, once an associate of George Soros and a key promoter of Haldia Petrochemicals. Mr Chatterjee sold Galaxy to the Future group after the company's managing director expired. The Future Ventures' prospectus says, "We do not have access to the offer documents and other records of Galaxy. We are, therefore, unable to provide details on the promise made and the performance achieved by Galaxy."

This is strange. As Future Ventures acquired Galaxy and should have had all the records of an important corporate action such as an IPO in place. A prospectus is a legal document. The fact that a listed company has lost a legal document like the prospectus is quite extraordinary.

The prospectus could have been procured through book running lead managers too which helped the company to come out with its IPO. These lead managers are few in number and they should have been able to source the information.

Enam Securities, JM Financial, Kotak Investment Banking are the lead mangers for Future Ventures' IPO and the company could have taken their help to get access to the previous records of Galaxy, including the information for the prospectus.

The data could have come from a third party provider of information like Prime Database. Worst, all prospectuses are screened and examined before they are cleared by the market regulator Securities and Exchange Board of India (SEBI). The company could also have accessed the required information relating to Galaxy from SEBI too-assuming that SEBI has a record of all the issues that it clears! But we are not sure whether Future Ventures made any efforts to get hold of a prospectus.

What is ironical is that SEBI decided to give a 'go-ahead' for the Future Ventures prospectus, unaware of the irony that a prospectus it had cleared 11 years ago has simply vanished from the system! As against this, won't the regulated entities be put through hell if any compliance paper of theirs is found missing?