SEBI ask merchant bankers to be careful while filing offer documents
MDT/PTI 16 October 2012

The market regulator advised all merchant bankers to take due care before filing the draft offer document as the framework for rejection of the offer documents has come into force

 
New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has asked merchant bankers to take due care before filing the draft offer document with it as the framework for rejection of the same has come into force, reports PTI.
 
"All Merchant Bankers are advised to take note of the same and take due care before filing the draft offer document with the Board," SEBI said in a circular.
 
In a general order dated 9th October, SEBI had announced a 'framework for rejection of draft offer documents' that came into force with immediate effect.
 
The framework had mentioned various factors such as rejection of the draft offer document if the purpose of utilising the proceeds is vague.
 
Among others, the draft document would not be entertained in case a major portion of the issue proceeds are proposed to be utilised for the purpose which does not create any tangible asset, like expenses towards brand building, advertisement, payment to consultants.
 
SEBI had said the list of draft offer documents rejected on the basis of the framework, along with the details of issuers or merchant bankers and the reasons for rejection, would be made public on the market regulator's website.
 
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