SEBI imposes Rs 18 lakh penalty on Taurian MPS, directors and merchant banker over IPO disclosures

The regulator alleged that Taurian MPS failed to disclose Taurian Engineering Pvt Ltd (TEPL) as part of its promoter group and did not disclose the entity's liquidation status in the IPO offer document. SEBI held that these omissions violated the disclosure requirements under the SEBI (Issue of Capital and Disclosure Requirements) Regulations. The order said Puja Bajla's shareholding in Taurian Engineering had crossed the 20 percent threshold prescribed under the regulations for classifying an entity as part of the promoter group.

Her shareholding had reached about 80 percent during the relevant period. Taurian MPS and its directors argued that Taurian Engineering's investment in the company had been written off and its shareholding in the issuer had fallen to zero before the IPO. They also said the entity was under liquidation and its affairs were controlled by a liquidator. SEBI rejected these arguments, stating that the promoter-group disclosure requirement could not be avoided merely because the investment had been written off or the entity was under liquidation.

The noticees had also not sought an exemption under the relevant regulations. The order noted that Taurian Engineering was not under liquidation when Taurian MPS filed its draft red herring prospectus on February 28, 2025. Although the company entered the corporate insolvency resolution process in 2023, a liquidator was appointed on April 4, 2025. The liquidation followed its failure to repay Rs 3 crore, along with interest, to a financial creditor.

SEBI said the liquidation status was material information that could affect investors' assessment of the promoter group and associated risks. The regulator also examined allegations concerning Taurian Iron and Steel Pvt Ltd and Taurian Infrastructure Pvt Ltd. However, it concluded that the alleged disclosure violations relating to these two entities were not established. SEBI held that Gretex Corporate Services had failed to exercise the required due diligence regarding the disclosure of Taurian Engineering's promoter-group status and liquidation.

The noticees argued that the IPO documents had undergone scrutiny by the National Stock Exchange and that the omissions were technical in nature. SEBI rejected the defence, saying exchange scrutiny did not absolve the issuer and merchant banker of their statutory disclosure obligations. The noticees have been directed to pay the penalties within 45 days of receiving the order.