SEBI v. RDB Rasayans Limited and Shanti Lal Baid (IPO proceeds and prospectus, 2022)

Dismissed

✓ Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In April 2022 a SEBI adjudicating officer held that RDB Rasayans and its managing director breached the ICDR and PFUTP rules by hiding material information in the 2011 IPO prospectus and misusing issue proceeds, but imposed no further penalty. The officer treated an earlier four-year market ban and a Rs 2 crore penalty on the directors as adequate, and rejected the separate allegation that proceeds were routed to fund first-day trading.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The order of 29 April 2022 concerns RDB Rasayans Limited, which floated a 45 lakh share IPO in September 2011 at Rs 79 per share (Rs 35.55 crore), and its managing director Shanti Lal Baid. The shares listed on BSE on 7 October 2011, opening at Rs 85 and closing the day at Rs 26.95, a collapse that prompted the SEBI investigation.

SEBI alleged two things: that the company moved IPO money to a related company in a circuitous way so that trading clients could buy the shares on listing day, and that it misused the proceeds and withheld material information from the prospectus, in breach of the ICDR Regulations, section 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations. The case had a long procedural history, including a Calcutta High Court writ petition and a Supreme Court settlement of the interim issues in 2014.

Relying heavily on a 2016 Securities Appellate Tribunal ruling in the directors' case, the adjudicating officer held the circuit-trading allegation could not be sustained. He did hold that the noticees broke ICDR Regulations 57 and 60(4) and the fraud provisions by suppressing material information in the prospectus and misusing the proceeds, which included a transfer of Rs 31.6 crore to a related company that was later repaid with interest.

No penalty was imposed. The officer noted that the other directors had been penalised Rs 3 crore, reduced to Rs 2 crore on appeal, that the noticees had already served a four-year debarment under an order of December 2014, and that a separate 2018 order had dealt with a listing-agreement breach. He concluded that adequate sanction already existed and disposed of the notices.

The record does not show the losses suffered by listing-day investors or whether any further proceedings followed. This page records the status as dismissed because the order ends without a sanction, although it contains adverse findings on the prospectus and use of proceeds.

This library tags the matter as misleading issuer disclosure, because the findings concern a prospectus that left out material information. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Misleading issuer disclosure — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2022-04-29 SEBI adjudication order disposing of notices (29 April 2022)

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order
• Order (PDF)

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.