Markets regulator Securities and Exchange Board of India (SEBI) warned yoga guru Baba Ramdev against any public communication that deviates from the compliance requirements set out following the issue of a follow-on public offering (FPO). The FPO in question pertains to Ruchi Soya which had filed its draft document with SEBI for a follow-on public offer (FPO) for raising up to Rs 4,300 crore.
The communication in question
Yoga Guru Baba Ramdev whilst addressing a gathering during his Yoga Shivir marketed the Ruchi Soya's FPO. He termed the investment as 'Mantra for becoming a Crorepati'. In videos that surfaced online, he further asks the followers to open a demand account.
Baba Ramdev-led Patanjali Ayurved had taken over the edible oil company in December 2019.
What SEBI said
SEBI said the public communication in question was not in compliance with the requirements under SEBI (ICDR) Regulations, 2018. Elaborating on its order, the regulator stated that no public communication pertaining to the issue should contain any offer of direct or indirect incentives of any manner, cash or any kind of services. "Issue advertisements shall not contain statements which promise or guarantee a rapid increase in revenue or profits," SEBI's order stated.
It further stated that all public communication in any media from the commencement of the date when the draft offer document is filed shall prominently disclose that the issuer is proposing to make a public issue of the specified securities with the offer document or letter.
"In view of the above, you are hereby warned to ensure compliance with SEBI (ICDR) Regulations, 2018. The warning is being issued without prejudice to any future action," SEBI's letter stated.