JM Financial’s share price fell more than 9% in early trade on Monday after capital markets regulator Securities and Exchange Board of India (Sebi) barred the company from acting as lead manager for any new public issue of debt securities. JM Financial shares fell as much as 9.82% to ₹79.30 apiece on the BSE.
Shares of JM Financial have fallen over 17% in the past week following sanctions by the Reserve Bank of India (RBI) against one of its group entities and now Sebi’s latest order.
Sebi found some serious mistakes while JM Financial was acting as chief operating officer for a special public issue.
Read here: Sebi bars JM Financial from taking new mandates amid lapses in debt issuance
However, as far as the existing mandates are concerned, Sebi’s March 7 order said that JM Financial can act as lead manager for the public issue of debt securities for two months.
The regulator has given JM Financial the freedom to file its responses/objections in the matter within 21 days.
However, JM Financial said it will fully cooperate with the capital market regulator in its investigation into the public issue of debt securities.
In an exchange filing, JM Financial said, “The company will fully cooperate with Sebi in this investigation.”
Read here: JM Financial says it will fully cooperate with SEBI in an investigation into the public issue of debt securities
The regulator will conduct an inquiry into these matters, completed within six months.
On March 5, the RBI barred one of its other group units, JM Financial Products, from providing loans against stocks and bonds, including sanctioning and disbursing loans against initial public offering (IPO) of shares, with immediate effect.
The bank regulator’s action was on the back of certain serious deficiencies observed in the company’s loan process. RBI also highlighted serious concerns about the governance issues in the financial services company, apart from violating regulatory guidelines.
At 9:50 am, shares of JM Financial Services were trading 7.65% lower ₹81.21 per on the BSE.
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Published: 11 Mar 2024, 09:51 IST