SEBI ordered an inspection of Corporate Capital Ventures and probed the operations and activities of the entity and its directors between August 2022 and June 2024.
Capital markets regulator Securities and Exchange Board of India (SEBI) is reportedly investigating Corporate Capital Ventures Limited. The Delhi-based merchant banker, which has managed some initial public offers (IPOs) of small and medium enterprises (SMEs), has come under the regulatory scanner for alleged violations of merchant banking regulations while managing public issues.
According to a report by news website Moneycontrol, SEBI has issued a notice to the merchant banking entity and named the company’s directors – Kulbhushan Parashar and Harpreet Kaur – along with a few other entities in the notice. The report added that the market watchdog’s investigation was triggered after it received an anonymous complaint alleging that Kulbhushan Parashar, through his relatives, bought shares in companies before taking them public.
SEBI ordered an inspection of the firm and probed the operations and activities of the entity and its directors between August 2022 and June 2024. During this period, Corporate Capital Ventures acted as the merchant banker for six SME IPOs: Oriana Power, Annapurna Swadisht, Droneacharya Aerial Innovations, Crayons Advertising, Creative Graphics Solutions India, and Rocking Deals Circular Economy.
According to the anonymous complaint received by SEBI, relatives of Kulbhushan Parashar were allotted 25,000 equity shares of Oriana Power on a private placement basis and 25,000 bonus shares. The allotment was made to Jagdish Kumar Prasad, and the IPO prospectus of Rockingdeals has listed Prasad as an immediate relative of Kulbhushan Parashar.
NSE imposes price control cap of 90% on SME IPO
Last month, NSE imposed a 90 per cent price control cap on SME IPOs amid rising concerns about froth in lesser-known SME stocks. “To standardise the opening price discovery and equilibrium price across exchanges during the special pre-open session for IPO on the SME platform, it has been decided to put an overall capping of up to 90 per cent over the issue price for SME IPOs,” said NSE in a circular.
The market regulator is already working on strengthening the eligibility criteria for the segment to ensure that fundamentally strong companies enter the market through the SME platform, launched in 2012. Earlier this year, SEBI chairperson Madhabi Puri Buch said some issuers and bankers were misusing the framework provided for SME listing. According to Buch, SEBI is collecting evidence following complaints of price manipulation in the segment.