SEBI issues a warning to Baba Ramdev on his remark about ‘guaranteed profits’

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Ketan Barot
Ketan Barot
I'm Ketan Barot working as an intern for Frontier India. I have a keen interest for journalism. When not at work, I try my hands at making memes, watch football (GGMU) and listen to Travis Scott. *Views are personal.

The Securities and Exchange Board of India (SEBI) has warned Baba Ramdev not to make any public statements that contradict the regulatory criteria set following the issuing of a follow-on public offering (FPO). The FPO under consideration is for Ruchi Soya, which has filed a draft document with SEBI for a follow-on public offer (FPO) worth up to Rs 4,300 crore.

In a popular video, Ramdev advises his followers to buy Ruchi Soya Industries stock if they want to become crorepatis.

“Ruchi Soya’s FPO is being discussed. I’m going to tell you the mantra for becoming a crorepati. Open a Demat account right now. When I tell you to buy Ruchi Soya shares, do so. Following that, he is seen adding in Hindi, “Shares of Patanjali, whose market cap is lakhs of crores, any global agency would inform you.”

The Patanjali Ayurved group, which is still unlisted, promotes Ruchi Soya. Sebi has censored the claims made by Ruchi Soya’s Board of Directors in a letter.

“In the video, Shri Ramdev, one of the issuer’s directors, is shown addressing a crowd at one of his Yoga Shivirs or Yoga Meets. In his talk, he is seen pitching the FPO of Ruchi Soya Industries and referring to the investment as a “Mantra for Becoming a Crorepati.” It should be noted that the relevant address is under the category of ‘Public Communication,’ as defined in Schedule IX of the SEBI (ICDR) Regulations, 2018. “Prima-facie, the accompanying address by one of the issuing company’s directors appears to be non-compliant with the following clauses of Schedule IX,” Sebi wrote in a letter to Ruchi Soya’s Board, on which Ramdev serves as a non-executive director.

Ruchi Soya gained Sebi authorisation to launch its Rs 4,300-crore FPO in August. The additional funding will assist the company in reducing its debt and promoter shares. Currently, the promoters hold 98.9 per cent of the company.


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