New Delhi – The Securities and Exchange Board of India (SEBI) has stopped First Overseas Capital Limited (FOCL) from taking on new securities work for two years and fined it ₹20 lakh. The ban follows two SEBI inspections that uncovered serious rule‑breaking by the merchant‑banker.
During an August 2022 review that covered April 2021 to March 2022, and a February 2024 probe that looked at April 2022 to October 2023, SEBI found that FOCL exceeded its underwriting limits by more than 20 times its net worth. The company also signed up for non‑securities activities, failed to keep the minimum net worth of ₹5 crore, and even gathered deposits from the public to meet those commitments. In addition, FOCL did not file half‑yearly reports, supplied false information, and did not confirm that its senior managers held current NISM certifications.
Warnings from SEBI in 2022 and 2023 went unanswered. FOCL’s website also omitted key disclosure items—such as issue type, subscription level, QIB holding, issuer financials, price data and how issue proceeds were used—violating SEBI’s public‑issue rules.
After the Securities Appellate Tribunal (SAT) instructed SEBI to act, the regulator discovered that FOCL had not met its net‑worth requirement since FY 2018‑19. These repeated violations raise risks for clients and investors.
Under SEBI’s order, FOCL cannot accept any new issue‑management assignments for two years. It must also pay the ₹20 lakh fine within 45 days of the order and close all open derivative positions within three months.
Source: ianslive
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