Market Regulator SEBI passed a Consent Order against Edelweiss Capital

Market regulator, Securities and Exchange Board of India passed a consent order against Edelweiss Capital for failing to exercise due diligence while conducting its business as merchant banker. Sebi ‘s inspection had revealed that Edelweiss Capital did not adopt independent professional judgment in verifying the records, visiting the places of the issuer companies and provided misleading information in prospectus. Also as per the inspection report it did not ensure adequate disclosures in the draft red herring prospectus including risk factors to the investors, failed to supervise the activities of sub-syndicate member, bankers and registrars to issues.

The case relates to incidences of Edelweiss Capital not adopting independent professional judgements in verifying the records and not providing correct information in Draft Red Herring Prospectus of its clients, among others.

SEBI had in 2010 appointed an adjudication order to look into the alleged violations. Edelweiss has in October 2010 made an application for settlement of proceedings through a consent order without admitting or denying the guilt.