SEBI Proposes ₹50,000 Fine for IPO Issuers Not Cooperating With Fund Tracking
· Business · LiveMint, Economic Times
SEBI has proposed allowing monitoring agencies to report directly to stock exchanges on the utilization of IPO funds. If a listed company fails to cooperate, the agency must prepare its report based on the best available information and attach a statement of non-cooperation. SEBI recommends a fine of ₹50,000 for each instance of non-cooperation reported during the applicable period. Stock exchanges would review compliance and issue notices within 30 days of the report’s due date, with continued non-cooperation potentially leading to frozen demat accounts of promoters. The proposals form part of a working group’s review of the Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, and are open for public comment.
Why it matters
Listed companies raising funds through IPOs will face stricter scrutiny and financial penalties if they do not cooperate with fund utilization monitoring. This aims to enhance transparency and protect public investors by ensuring timely and accurate disclosure of how IPO proceeds are used.
Read the original report — LiveMint
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