JM Financial is among the leading investment banking firms in India. The company has several other branches outside India. The Securities And Exchange Board Of India (SEBI) announces an investigation of the company due to allegations against it for involvement in fraudulent practices. At the same time, JM Financial is trying to manage things following all the conditions of SEBI. The investigation further leads to the company discontinuing several of its services. What will happen next?
Why Is JM Financial Barred by SEBI?
SEBI barred JM Financial from public debt issues due to allegations of involvement in fraudulent activities. The investigation will take place soon. The company prefers not to interfere in the SEBI’s investigation. They like to solve the matter as soon as possible by following the settlement mechanism. SEBI also passed several directions in its interim order while JM Financial agreed most of them. The allegations will make an impact on the company’s reputation and trustworthiness in the market.
Jm Financil is taking the situation calmly. The company also mentioned their views regarding the current situation. They mention that SEBI’s directions don’t interfere with other activities and are only for the company’s role as a lead manager to the public issue of debt securities. Considering the seriousness of the issue, the company wants to discontinue its IPO financing business through JM Financial Products, its subsidiary. The company confirms its action which SEBI makes public afterwards.
Thus, JM Finacial will now not be able to work as a lead manager of any public issue of debt securities. This barrier will continue until 31 March 2025 or till the case is resolved, whichever is earlier. JM Financial took a bold step to voluntarily discontinue its service of IPO financing from its subsidiary company. JM Financial is referring to resolving the matter soon.
According to SEBI, the company is responsible for involvement in fraudulent activities. JM Financial incentivised the investors to apply in public issues and carry transactions in a pre-determined manner. It means that JM Financial has allegations of intentionally or strategically making investments. It leads to more subscriptions to a particular public issue. The company has been running since 1973 and looks confident in its services. However, the investigation will tell the truth.
JM Financial will currently continue with its other operations. Its role as a lead manager in the debt public issues and its IPO financing will discontinue from now until further notice. Stay tuned for more information on our website.
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