Due to unfair business practices, capital markets regulator Sebi on Thursday prohibited JM Financial Ltd. from accepting a new mandate to serve as lead manager for any debt instruments that are issued to the public.
Sebi stated in its interim ruling that JM Financial can, however, continue to serve as a lead manager for the public issuance of debt securities for a period of 60 days in the event of existing mandates.
Days prior, JM Financial Products Ltd. was prohibited by the Reserve Bank from offering any kind of financing secured by shares and debentures, including the approval and disbursement of loans against initial public offerings.
JM Finance Company
Following a standard investigation of the public offerings of Non-Convertible Debentures (NCD) in 2023, Sebi issued its directive.
"The regulatory body observed that JM Financial, the noticee, and its affiliated group companies appeared to have provided certain investors with a certain exit at a profit, which may have encouraged them to file for the public offering in violation of the legal requirements," it added.
It went on to say that JM Financial's behavior seemed to be an unfair trading practice.
