Sebi asks Trafiksol to refund IPO money citing fraud

MUMBAI: Sebi has directed Trafiksol ITS Technologies to refund the Rs 44.9 crore paid by investors who were allotted shares in the company's IPO. BSE, in coordination with bankers, will oversee the refund process, which should be completed within one week from the date of the order, along with the interest earned on the issue's proceeds.

Sebi had received a complaint prior to the listing of the shares, alleging that objects of the issue included the purchase of software from a third-party vendor with questionable credentials. An investigation found that the vendor was a shell entity, and that the company had engaged in a cover-up when the vendor's credentials were questioned. The order aims to protect investors' interests by ensuring they get their money back.

"The finding that the company was involved in cover-up is based on fact that it can be reasonably presumed that MD of the company, given his long association with this sector, at the very least, was aware that the profile of the TPV directors, which was submitted to BSE, was fabricated. Therefore, the company's defense - that it merely forwarded documents provided by the TPV to BSE without verifying their authenticity - must be rejected," the order said.

Trafiksol, which provides solutions for traffic and toll management projects through technology, had filed a draft red herring prospectus with BSE for an IPO on the SME Platform, issuing 64.1 lakh equity shares at Rs 66-70 per share. The offering was oversubscribed nearly 345.7 times, raising Rs 44.9 crore. The listing, scheduled for Sept 17, 2024, was deferred due to a complaint.

"It is pertinent to note that other findings of probe are yet to be adjudicated. So, submission made by noticee, that IPO may be permitted to go ahead subject to use of proceeds being monitored by an agency appointed by Sebi or BSE, cannot be considered," the order said.


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