December 19, 1997
PR No. 168/1997

Suspension of Ruchi Infrastructure Ltd.

M/s. Ruchi Infrastructure Ltd. a Category I Merchant Banker lead managed the public issue of M/s. Boom Securities & Leasing Ltd. (BSLL) which opened for subscription on April 4, 1996. The investigations were conducted by the SEBI to probe into the alleged irregularities in respect to the public issue of BSLL. The investigations brought out that the shares of BSLL were listed prior to realisation of the stock invests. It was also revealed by the investigations that certain stock invests which were discovered to be fake were lost by the Registrar - M/s. Softrack Technology Exports Ltd. who has also been suspended for a period of one year. Further in some instances shares were not despatched to successful allottees. The stock invests were deposited in banks which were not authorised as collecting banks. The Lead Manager failed to ensure before the listing that stock invests were realised and deposited in the authorised banks in a separate public issue account. He also failed in discharge of due diligence in monitoring the post issue activities. 
Accordingly an Enquiry Officer was appointed by the Chairman, SEBI, under the SEBI (Merchant Bankers) Rules & Regulations 1992. 
A report of the Enquiry Officer was submitted to Chairman, SEBI. After considering the report, Chairman gave the due opportunity of reply and hearing. A personal hearing was also granted by the Chairman. In view of the material on record, the reasons furnished in the enquiry report and various submissions made by the Merchant Banker from time to time, Chairman, SEBI, came to conclusion that the Merchant Banker has violated the provisions of the SEBI Act and SEBI (Merchant Bankers) Rules & Regulations 1992. Chairman, SEBI therefore has passed an order suspending the Merchant Banker - M/s. Ruchi Infrastructure Limited, for a period of three months with effect from December 31, 1997.