SEBI canceled this IPO; ordered to return the money along with interest

Trafiksol ITS IPO: Market regulator SEBI on Tuesday ordered Trafiksol ITS Technologies to cancel its Rs 45 crore IPO and refund the money to investors along with interest. SEBI has taken this decision after reports of misleading information in the company’s prospectus and suspected collusion with a shell entity.

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Trafficsol ITS is a Noida-based company that provides intelligent transportation systems and automation solutions for traffic and toll management projects.

In October, BSE had postponed the listing of Trafficsol ITS Technologies Limited (TITL) on the SME platform following investor concerns. The Rs 45 crore IPO was subscribed over 345 times, receiving bids worth over Rs 10,000 crore.

SEBI ordered to return the money

SEBI has ordered BSE to monitor the refund process within a week from the date of this order. Also, Trafficsol has been directed to take necessary steps to cancel the shares transferred to the demat accounts of the bidders.

In fact, before the company’s shares were listed on the exchange, BSE had received a complaint from the Small Investors Welfare Association (SIREN). In its 16-page order, SEBI has said that Trafficsol knowingly relied on fraudulent documents submitted by a dubious third-party vendor (TPV) to justify the purchase of software worth Rs 17.7 crore.

Trafficsol fails to convince SEBI

Apart from this, SEBI’s investigation also revealed that TPV was a shell entity whose financial records were suspicious. Apart from this, it had no prior experience in software development. Therefore, SEBI has concluded that TPV was selected on the basis of fake profiles and forged financial documents.

While Trafficsol claimed that it had simply received a quote from TPV and selected it as per its procurement policy, the company failed to clearly explain why it selected it in the first place.

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