SEBI finds merchant banker delayed disclosure of BSE market ban

This is an adjudication order by SEBI against Swaraj Shares & Securities Private Limited, a merchant banker, for alleged violations of regulations regarding due diligence, disclosure of material facts, and compliance with underwriting and insider trading norms during specific open offers and an IPO.

Who it concerns: Swaraj Shares & Securities Private Limited (Merchant Banker); G. D. Trading and Agencies Limited (Target Company, now RRP Semiconductors Limited); Micropro Software Solutions Limited (Issuer); Ira Ramesh Mishra (Acquirer); R. K. Chodankar (Acquirer); Ceres Company Private Limited (Promoter).

What SEBI found or ordered

• SEBI alleged that the merchant banker suppressed a material fact by failing to disclose a BSE restraint order against the Target Company (G. D. Trading and Agencies Limited) in two open offers.
• SEBI alleged that the merchant banker failed to exercise due diligence in the IPO of Micropro Software Solutions Limited, specifically regarding working capital requirements and discrepancies in the underwriting agreement (94.98% vs 100%).
• The order cites alleged violations of the SAST Regulations, Merchant Bankers Regulations, ICDR Regulations, and Prohibition of Insider Trading Regulations.
• The inspection period covered April 01, 2022, to March 31, 2025.
• The Show Cause Notice was issued on September 07, 2026.

Also in the document

• The order notes that the Target Company was restrained from accessing the securities market from August 23, 2017, to August 22, 2027, by a BSE order.
• SEBI observed that in one instance, the merchant banker disclosed the restraint order for the first time only in the draft letter of offer dated April 30, 2024, which was characterized as delayed and inconsistent disclosure.
• The document text provided is truncated and does not contain the final penalty amount or the final decision on the allegations.