SEBI’s inspection found that the company had been non-compliant with capital adequacy requirements since FY18–19 | Photo Credit: ABEER KHAN
The market regulator has also imposed a monetary penalty of ₹20 lakh on the investment banking firm. It cannot take any new mandate for IPOs, arrangements, or corporate advisory for two years.
In its final order issued by Whole-Time Member Amarjeet Singh on Thursday, SEBI said FOCL violated several provisions of the Merchant Bankers Regulations, including exceeding the prescribed underwriting limit of 20 times its net worth, failing to maintain adequate net worth, and accepting public deposits to meet underwriting obligations.
The regulator said that FOCL submitted “false and misleading information to SEBI,” indulged in business unrelated to the securities market, and failed to disclose details of securities acquired pursuant to underwriting obligations. The firm also did not maintain compliance with NISM certification norms and did not submit mandatory half-yearly reports on time.
SEBI’s inspection found that the company had been non-compliant with capital adequacy requirements since FY18–19 and only met the ₹5 crore net worth norm after being directed to do so by the Securities Appellate Tribunal in December 2024.
Due to the repetitive nature of the violations, Amarjeet Singh said the company’s conduct was not in “good faith” and “reeks of mala fide.” The order, effective immediately, restrains the firm from buying, selling, or otherwise dealing in securities for two years. FOCL must pay the fine within 45 days.
Published on October 23, 2025
