How two SMEs colluded to defraud investors by misusing IPO proceeds

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Synopsis
According to Sebi investigation, two SMEs orchestrated fictitious transactions between themselves to create an illusion of robust financial health. This false portrayal of growth and financial stability lured investors, enabling promoter entities to exit at the expense of unsuspecting shareholders.

In a fresh crackdown on a small and medium enterprise (SME) IPO company, the Securities and Exchange Board of India (Sebi) last week took decisive action against Mumbai-based background verification company SecUR Credentials and its managing director, Rahul Belwalkar. Sebi banned both from the securities market, citing financial irregularities and lapses in corporate governance. This move follows the market regulator’s action from the previous