SAT stays SEBI order against Trafiksol

The Securities Appellate Tribunal (SAT) has ordered an interim stay on SEBI’s order against Trafiksol ITS Technologies. On December 3, SEBI, in an unprecedented move, had asked Trafiksol ITS Technologies to refund the money paid by investors towards subscribing to the company’s IPO. SEBI had also asked Trafiksol to return the interest amount accrued on the money back to the investors who were allotted the company’s shares in the said IPO.

Trafiksol had challenged SEBI’s order against itself before the SAT and after hearing both parties, SAT ordered an interim stay on SEBI’s order against Trafiksol. The matter continues to be heard at the SAT.

As per SEBI’s order, the market regulator received a complaint which alleged that the objects of Trafiksol’s IPO included the purchase of software valued at nearly ₹18 crore from a vendor which, inter alia, had questionable financials and failed to file its annual financial statements with the Ministry of Corporate Affairs (MCA). In view of the above complaint, BSE in consultation with SEBI deferred the listing of the shares of Trafiksol and initiated its investigation into the matter.

SEBI’s investigation in the matter found an intent of diversion of funds through misleading objects of the issue. SEBI also found mis-statement of financial statements and concealment of material facts in the IPO prospectus of Trafiksol.