New Delhi, June 9 (IANS) IPO-bound quick commerce platform Zepto has disclosed in its updated draft red herring prospectus (UDRHP) that its founders — Aadit Palicha and Kaivalya Vohra — received summons from the Directorate of Enforcement (ED) in April under proceedings linked to the Foreign Exchange Management Act (FEMA), 1999.
According to the updated filing submitted to the Securities and Exchange Board of India (SEBI), the ED sought information and documents related to the company and its promoters, including details of foreign investments, shareholding patterns, financial statements, loans and guarantees, income tax returns, bank accounts and the company’s business model.
The disclosure was made in the updated IPO papers filed with the Securities and Exchange Board of India (SEBI) as the company prepares for its stock market debut.
According to the filing, the ED issued summons dated April 8 to both promoters, requiring them to appear before the agency and furnish information relating to the company’s business and their personal holdings.
The information sought included details of foreign and overseas investments, audited financial statements since FY21, immovable properties, shareholding patterns, loans and guarantees, income tax returns, bank accounts and a note on the company’s business model.
Complying with the summons, Kaivalya Vohra appeared before the ED on April 17 and April 22, while Aadit Palicha appeared on April 20 and May 15.
The filing stated that the founders provided the information and documents sought by the ED, along with additional details requested during subsequent interactions with the agency.
These included information relating to the company’s holding structure, business arrangements and supporting documents such as agreements and invoices.
“As on the date of this Updated Draft Red Herring Prospectus-I, we have not received any further communication from the ED since submitting our response,” the company said in the filing.
However, Zepto noted that it could not assure investors that there would be no future inquiries or that the matter would not escalate into investigations, legal proceedings or possible penalties.
The disclosure has been included under the risk factors and promoter-related litigation sections of the updated prospectus.
SEBI had approved Zepto’s proposed initial public offering in May. The public issue is expected to comprise a fresh issue of equity shares worth about Rs 8,000 crore and an offer for sale by existing shareholders.
The company plans to utilise the proceeds from the fresh issue to expand its dark store network, strengthen technology and cloud infrastructure, and support marketing and business promotion activities through its subsidiary, Zepto Marketplace Private Limited.
–IANS
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