The Securities and Exchange Board of India (Sebi) has issued a show-cause notice to RBL Bank over possible rule violations, which could hinder the 72-year-old lender’s plans to raise an estimated Rs 1,450 crore though an initial public offering (IPO).
The notice stems from share allotments under earlier management on three occasions to more than 49 investors, in possible breach of Sebi rules and the Companies Act on public offerings.
In 2003, it made a rights issue of 9.54 lakh equity shares at Rs 100 apiece. This was subscribed to the extent of 4.71 lakh shares. The unsubscribed 4.83 lakh shares were allotted to 2,591 investors, most of them from Kolhapur and customers.
In 2006, came another rights issue of 19.38 lakh shares at Rs 100 apiece, which was subscribed to the extent of 8.17 lakh shares. The unsubscribed 11.21 lakh shares were allotted to 1,969 investors.
Subsequently, stemming from the rights issue, the bank made a preferential allotment of 2.52 lakh equity shares at Rs 100 apiece to 352 persons.