Complaints Against Rosmerta Ahead Of Rs 200-Cr IPO

I have lodged a formal complaint against the accused persons and other unknown associates, who are their aides in their illegal acts of deliberate suppression of crucial facts and concealment of material information regarding their business activities and business interests - Rohit Vijay Nirmal, Mumbai-based investor

Mumbai: Several complaints with Securities & Exchange Board of India (Sebi), Finance Ministry and other authorities have been filed against the promoters of Rosmerta Digital Services Ltd (RDSL), a three-year-old alleged dummy company that has filed a Draft Red Herring Prospectus (DRHP) with the Sebi to raise over Rs200 crore through a forthcoming SME IPO, as per the sources. Bizz Buzz has seen the letter of complaint. The promoters namely Kartick Vivek Nagpal, Karan Vivek Nagpal and Rosmerta Technologies and Trust Promoter representative Aarti Nagpal and other unknown persons have been accused of resorting to and indulging in fraudulent malpractices by deliberate concealment of crucial material facts/information and presenting distorted financial data, while filing ‘DRHP of the newly formed entity namely Rosmerta Digital Services’.

They have also been accused of being a front for Vivek Nagpal, who allegedly involved in capital market manipulation, insider trading and money laundering and other organized crime through complex web of interrelated entities.

An investor, who doesn’t wish to be quoted, has said in his complaint to the Union Finance Secretary Tuhin Kanta Pandey that the investment bankers he has hired have absolutely no standing or background in the capital markets and there is so much information, which should be disclosed in the red herring prospectus so that the investors can transparently read the same but he has purposely chosen not to disclose the same.

Another Mumbai-based investor Rohit Vijay Nirmal said: “I have lodged a formal complaint against the accused persons and other unknown associates, who are their aides in their illegal acts of deliberate suppression of crucial facts and concealment of material information regarding their business activities and business interests and further actively involved in fraudulent activities including market manipulation, money laundering, siphoning of loan amount availed from banks and other organized financial crime activities and violation of multiple regulatory frameworks.”

RDSL has presented dramatically and artificially inflated and manipulated financial figures in their DRHP with an aim to rig share pricing of IPO to higher side.

The firm is part of the Rosmerta Group and Vivek Nagpal, who has been linked to various businesses under the Rosmerta umbrella, has a significant connection to Rosmerta Group’s operations through the accused persons and proxy directors, the complainant said.

“The absence of transparent and independent governance mechanisms to mitigate and address these conflicts further exacerbates concerns, raising serious doubts about the integrity and fairness of the decision-making processes within these entities,” he said.

“Given his deep involvement, there is a risk that business decisions could be swayed to benefit his personal interests or those of his close associates, rather than the interests of public shareholders. This creates a situation where the lines between personal and corporate interests are blurred, potentially compromising corporate governance standards and shareholder value,” he further said.

Further despite the claims of disassociation by accused persons herein, these entities continue to be promoted by Vivek Nagpal, who openly represents himself as the founder of Rosmerta Group, the letter said.

In view of the gravity of the deliberate non-disclosures, concealment of facts, offenses by the accused person’s along with other unknown persons and the overwhelming evidence provided, it is hereby requested to protect the interests of potential retail investors and maintain the integrity of the capital markets by disapproving the DRHP filed by Rosmerta Digital Services, the complainant said.

The authorities have been urged to suspend all preparations for Rosmerta Digital Services’ listing until a comprehensive and detailed investigation is conducted in the matter from all angles.