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The Securities Appellate tribunal (SAT) has allowed the listing of Vaswani Industries on the condition that the company would give a withdrawal option to retail investors (to the extent of 15,00,348 shares as set out in its letter dated 8th July 2011) and also fulfil the minimum subscription criteria.
SEBI had directed stock exchanges on May 19 to withhold the listing of Vaswani Industries following complaints of irregularities in subscription especially huge withdrawals and rejections after IPO closure.
With SEBI asking stock exchanges to withhold the listing, the 10 week norm (the maximum time limit from the date of closure of an issue to listing) had been exceeded and no listing was possible under the existing prospectus.
The company shall follow the other procedures laid down in the SEBI order dated July 11, 2011 for the purpose of the withdrawal of offers by retail investors (RIIs), and other related issues, said SAT.
SAT said that after completion of withdrawal of offers by RIIs, exchanges should allow listing only after placement of those shares with the book running lead manager Ashika Capital or investors identified by the BRLM, and subject to the receipt of minimum subscription and any other compliance.
Bonus
The company has been directed to give one bonus shares for every four shares held for all shareholders excluding promoter and promoter group, after it has been listed. SAT clarified that that promoter and the promoter group entities shall not directly or indirectly receive the bonus shares mentioned above.
Vaswani Industries has been asked to advertise the details of the withdrawal option and the bonus issue within seven days of the order and clarify the process of withdrawal and bonus issue using an illustration in the advertisement.
SAT said that trading in Vaswani shares on the stock exchanges shall be permitted only after the bonus issue of shares and their listing is completed in all respects.
The entire process regarding the withdrawal of offers and the bonus issue shall be completed within sixty days of this order, said the tribunal.
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