Key Points
- SEBI cancels Trafiksol ITS Technologies’ BSE-SME IPO.
- Company must refund ₹44.87 crore to investors.
- Concerns about the vendor’s financials led to the investigation.
- BSE and bankers will manage the refund process, to be completed within a week.
- Shares will be moved to a separate demat account for cancellation.
Looma News
The Securities and Exchange Board of India (SEBI) has canceled the BSE-SME IPO of Trafiksol ITS Technologies and ordered the company to refund ₹44.87 crore raised through the issue. This decision followed an investigation into the company’s financial activities, which began after a complaint from the Small Investors’ Welfare Association (SIREN). The complaint raised concerns that Trafiksol intended to use part of the funds to buy software worth ₹17.70 crore from a vendor with questionable financial records.
Trafiksol launched its IPO between September 10 and 12, raising a significant amount of money, with the issue being subscribed more than 345 times. However, after the IPO closed, SEBI and BSE received a complaint about the vendor’s lack of financial transparency and its failure to submit necessary documents to the Ministry of Corporate Affairs. As a result, BSE delayed the listing of Trafiksol’s shares, in consultation with SEBI.
On October 11, SEBI issued an order to look into the disclosures made by Trafiksol. The investigation found that the vendor involved was a ‘shell entity.’ SEBI, led by whole-time member Ashwani Bhatia, instructed Trafiksol to refund the IPO proceeds to investors who had been allotted shares. The refund process will be managed by BSE and the issue’s bankers, and must be completed within one week.
Once the refunds are completed, the shares will be transferred to a demat account in the company’s name, and steps will be taken to cancel them. SEBI’s order ensures that investors’ interests are protected and that the process is carried out transparently.
