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monu dubey (Querist)
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29 July 2012 Company ‘A’ having its registered office in Mumbai made an initial public offer under a prospectus in 2011 under the book building procedure. The issue was very successful and was subscribed by large number of retail investors as well as Indian and foreign institutional investors including US based FIIs. The transaction was handled entirely by Indian merchant banks but part of the selling effort was done with the help of foreign brokerage house who are associated with the Indian merchant bank.
The offering was completed at Rs.100 per share and the issue size was Rs.500 crores, of which Rs.250 crores was new capital raised by the company and Rs.250 cores was an offer for sale by the promoters. Subsequently it was discovered that there was a tax liability of Rs.300 crores which had not been disclosed. There is pending litigation in relation to tax claim and a final judgment of the Supreme Court is awaited. There was no mention about this in the prospectus.
question 1:-Your client is a housewife in Baroda who has invested her life savings in the IPO and seeks redress. Advise. .....sir i need answer today