Yoga Guru Baba Ramdev | SEBI | Securities Law

Securities and Exchange Board of India (SEBI) on Thursday, September 30, 2021 wrote a letter to Ruchi Soya warning the company to ensure compliance with SEBI (ICDR) Regulations, 2018. This was issued in light of the video of Baba Ramdev, director of the Company who had in a gathering of yoga sessions marketed the FPO and termed the investment as ‘Mantra for becoming a Crorepati’

SEBI has alleged that the above address with regards to FPO of Ruchi Soya Industries Ltd is prima facie non-compliance of Schedule IX of SEBI (ICDR) Regulations, 2018

In germane to the above, Sumit Agrawal of Regstreet Law Advisors has been quoted by LiveMint and BusinessToday in their article titled “Ramdev’s ‘guaranteed returns’ remarks: SEBI likely to act against yoga guru” and by Mint in their article titled “SEBI unhappy with Baba Ramdev’s viral stock sermon”

Sumit is of the opinion that in such matters SEBI usually investigates the timing, the reason and trading by company-connected persons around the time of such statements. Such cases are investigated as a fraudulent and unfair trade practice because the statement of the functionaries may impact the prices of the securities. Additionally, in such cases SEBI has in past imposed monetary penalties and also has passed a warning and cease and desist order against a functionary. For a charge of securities fraud, requirement of threshold of evidence is very high and recently SAT had set aside had set aside SEBI’s order against Emami chairman since he told a journalist that he was interested in acquiring Amrutanjan Helathcare. Thus, probing into such statements for its motive and their impact is an ordinary course of regulatory function of SEBI.

Read the comment and the detailed article here:

https://lnkd.in/di-P3UFx​

https://lnkd.in/dMkYESuQ​

Securities law enthusiasts and learners must see the company’s clarification on BSE available at https://lnkd.in/dgHq7NfP to understand how Securities law looks at such issues, and perhaps research on the way SEBI has dealt with similar matters in the past – with companies and individuals.

From the company’s perspective, on one hand making public comments is the need for their functionaries to run and solicit business, they need to sensitise the executives of do’s and don’t in view of wide securities laws where even unintentional statements could still be in the ire of the regulator.