A public interest litigation filed in the Bombay high court has demanded a probe into the way some companies lure investors into subscribing to their IPOs by giving false information about their financial position and prospects.
M Furquan, the petitioner, has sought a CBI probe into the alleged fraud through the PIL filed this week.
The high court has issued notices to market regulator Securities and Exchange Board of India and CBI in this regard, petitioner's lawyer K T Thomas told PTI. The case is expected to come up for hearing on July 5.
The petitioner says while floating IPOs, several companies put out misleading advertisements, giving false information about company's 'fundamentals'.
"Later, the company's stock tanks", causing loss to the investors, with the company management having "mopped huge sums through IPO", the petitioner states.
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