SEBI orders action against First Overseas Capital over net worth violations

Who it concerns: First Overseas Capital Limited (FOCL); Mr. Satyen Dalal (Chairman and Managing Director); Mr. Rajesh Mewavala; Boisar Realities Private Limited; Falcon Recreational Activities Private Limited; Chasam Investments and Leasing Private Limited; Mr. Rushabh Shroff; Ms. Mala Soneji.

What SEBI found or ordered

• SEBI found FOCL failed to maintain the mandatory net worth of ₹5 Crore.
• SEBI found FOCL undertook underwriting obligations exceeding 20 times its net worth.
• SEBI found FOCL accepted public deposits to fulfill underwriting obligations.
• SEBI found FOCL submitted false and misleading information to the regulator.
• SEBI found FOCL indulged in business other than the securities market.
• An interim order dated October 23, 2024, debarred FOCL from taking new issue management mandates.
• The Securities Appellate Tribunal (SAT) stayed the debarment on December 11, 2024, subject to FOCL bringing in ₹3 Crores to meet net worth requirements.
• FOCL complied with the SAT direction by issuing preference shares to its CMD, Mr. Satyen Dalal, to raise the required capital.
• The order concludes the enquiry proceedings initiated under the SEBI (Merchant Bankers) Regulations, 1992.

Also in the document

• The order is a 'Final Order' dated October 3, 2025, concluding proceedings that began with inspections in 2022 and 2024.
• The case involved a dispute over the calculation of net worth, specifically regarding a ₹3 Crore loan to an individual (Mr. Rajesh Mewavala) that was considered a doubtful debt by SEBI but included in net worth by the company's auditors.
• The company claimed the funds invested in Falcon Recreational Activities Private Limited were permitted 'Unquoted Investments' rather than prohibited real estate business activities.
• The company alleged that SEBI double-counted devolved underwriting obligations in its calculations.