A few days before to the WeWork IPO debut, the company and the Securities Exchange Board of India are in front of the Bombay High Court.
Vinay Bansal, an investor, has petitioned the Bombay High Court, claiming that the Draft Red Herring Prospectus (DRHP) conceals a criminal chargesheet against the promoters for significant economic offenses and includes key nondisclosures and misleading representations.
The suit asked SEBI to issue a reasoned and spoken order ordering the agency to resolve Bansal’s complaint in a timely manner. Additionally, it requested that SEBI look into the claims and hold off on listing securities until the writ case was resolved.
Bansal had filed a complaint with SEBI, painstakingly outlining serious flaws in WeWork’s DRHP (which are still evident in the RHP), including false claims regarding brand ownership, a precarious financial situation, and a startling concealment of the status and repercussions of criminal proceedings involving serious economic offenses against its major promoters.
The petition further asserts that SEBI has the express authority to forbid a matter for the protection of investors under Section 11A of the SEBI Act.
“If SEBI determines that an offer document is constructed in a way that might hurt investors, includes false assertions, or hides important information, it may use its authority under Section 11A of the SEBI Act to stop the issue from going to market,” the plea said.
The petition further argued that SEBI has not made a decision or issued a reasoned communication in spite of the complaint being filed, which is a violation of the agency’s obligation to issue a speaking order.
WeWork declined to comment when Times Now contacted them since the case is still pending in court. They said that “the flow of law will resolve any subject.”