Presstonic Engineering Penalised Rs2 Lakh for Misrepresentation in IPO Prospectus
Moneylife Digital Team 20 May 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs2 lakh on Presstonic Engineering Ltd (PEL) for misrepresenting information in its initial public offering (IPO) prospectus. The prospectus was filed for listing on the small and medium enterprises (SME) platform of the National Stock Exchange (NSE). SEBI’s investigation found that PEL and its lead manager failed to carry out proper due diligence and made false disclosures about the criminal history of one of the company's directors.
 
In an order, Amit Kapoor, adjudicating officer of SEBI, says, “The role of a merchant banker (MB) is crucial as a facilitator to such companies in the securities market. So, it is of utmost importance that every MB abides by the provisions of SEBI regulations and various guidelines issued by SEBI or Stock Exchanges. The non-compliances on the part of Presstonic Engineering as brought out shows that it has failed in its fiduciary duties owed to its clients."
 
SEBI initiated an investigation following a complaint alleging that Presstonic Engineering IPO prospectus, filed for listing on the SME platform of the NSE, contained misleading information. The prospectus stated that no criminal cases or penalties were pending against the company’s directors, promoters or related entities.
 
However, SEBI’s examination revealed that KY Supriya Murthy (KYSM), a non-executive director of Presstonic Engineering, was convicted in a cheque bounce case in 2015 and fined Rs65,000 as part of a court-ordered penalty.
 
Despite this material fact, Presstonic Engineering failed to disclose the conviction and penalty in the IPO documents. The lead manager of the issue, Finshore Management Services Ltd (FMSL), relied on a legal adviser’s report that only covered court matters from 2023 to 2024, and on Ms Murthy's declaration stating there were no litigations against her. This resulted in inadequate due diligence by the lead manager and false disclosures in the prospectus.
 
Further, SEBI rejected the contention that the case was too old or insignificant to be disclosed, emphasising that all relevant past penalties must be transparently reported to enable investors to make informed decisions. The commission held that the Rs63,000 compensation ordered by the court was a penalty and should have been disclosed.
Comments
Supreme Court Says Cryptocurrency Needs To Be Regulated, Banning Not an Option
Ummar Jamal (Bar  and  Bench) 20 May 2025
The Supreme Court on Monday orally questioned why no regulation is being considered to govern cryptocurrency (Shailesh Babulal Bhatt v. State of Gujarat & Another).
 
A Bench of Justice Surya Kant and Justice NK Singh observed that...
SKSE Securities Fined Rs2 Lakh by SEBI for Misreporting Trading Terminals
Moneylife Digital Team 20 May 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs2 lakh on SKSE Securities Ltd (SKSE) for multiple regulatory violations, including improper supervision of its authorised person (AP), HJS...
Deutsche Bank and Yes Bank Fined Rs79.60 Lakh by RBI
Moneylife Digital Team 19 May 2025
Reserve Bank of India (RBI) has imposed a penalty of Rs50 lakh on Deutsche Bank AG and Rs29.60 lakh on Yes Bank Ltd for non-compliance with the directions issued by the banking regulator.
 
Deutsche Bank has been penalised for not...
IPO Irregularities: SBL Infratech and Fast Track Finsec Slapped with Rs15 Lakh Penalty by SEBI
Moneylife Digital Team 19 May 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed a total penalty of Rs15 lakh on SBL Infratech Ltd (noticee 1) and its merchant banker Fast Track Finsec Pvt Ltd (noticee 2) for serious lapses and regulatory...
Array
Free Helpline
Legal Credit
Feedback