Allegations of Concealed Disclosures in Rosmerta Digital Services Ltd’s IPO Filing
India:Investors have called for an in-depth investigation into the SME IPO filing of Rosmerta Digital Services Ltd, citing allegations of fraudulent practices and financial misrepresentation. Several complaints have been lodged with the Securities & Exchange Board of India (SEBI), the Finance Ministry, and other regulatory bodies, expressing concerns about the company’s Draft Red Herring Prospectus (DRHP), which seeks to raise over ₹200 crore.
The key promoters of Rosmerta Digital Services Ltd—Mr. Kartick Vivek Nagpal, Mr. Karan Vivek Nagpal, Rosmerta Technologies Ltd, and Trust Promoter representative Mrs. Aarti Nagpal—are accused of deliberately withholding vital information in the DRHP. Sources allege that these promoters presented manipulated financial data and omitted significant details, casting doubts on the legitimacy of the newly established entity.
It is further alleged that the promoters are acting as proxies for Mr. Vivek Nagpal, the father of Kartick and Karan Nagpal and the husband of Mrs. Aarti Nagpal. Mr. Vivek Nagpal has a controversial history, including allegations of market manipulation, insider trading, and money laundering through a complex network of related entities. He was previously implicated in the 2001 stock market scandal involving Ketan Parekh, according to the Joint Parliamentary Committee.
Mumbai-based investor Rohit Vijay Nirmal filed a formal complaint accusing the promoters of intentionally concealing crucial information, highlighting fraudulent activities, market manipulation, and false representations in the DRHP. “The promoters are acting under the influence of Mr. Vivek Nagpal, who has a proven track record of market manipulation, resulting in significant losses for retail investors,” Nirmal stated.
The complaint also claims that despite a prior ban prohibiting Mr. Vivek Nagpal from accessing the securities market, the accused promoters have colluded with him, failing to disclose his involvement with Rosmerta Digital Services Ltd. This omission is seen as a direct violation of Indian disclosure regulations.
Concerns have been raised by investors over the financial figures in the DRHP, which they believe are inflated and manipulated, potentially misleading investors and artificially boosting the IPO’s valuation. Although Mr. Vivek Nagpal holds no official position in Rosmerta Digital Services Ltd, he is reportedly playing a significant behind-the-scenes role within the broader Rosmerta Group. His involvement is believed to be downplayed in the filings due to his legal issues and past criminal allegations.
“The promoters intentionally concealed their relationship with Mr. Vivek Nagpal, a convicted economic offender, to mislead investors and regulatory authorities,” the complaint asserts. It further points to a lack of transparent governance practices, raising serious concerns about conflicts of interest and the potential for company decisions to be manipulated for personal gain.
Despite assertions from the promoters that they have distanced themselves from Mr. Vivek Nagpal, the complaint suggests he continues to actively promote Rosmerta-affiliated entities, publicly identifying himself as the group’s founder. Additionally, the complainant highlighted ongoing legal cases in Maharashtra related to fraudulent bank guarantees issued by Rosmerta, which were not fully disclosed in the DRHP.
In light of these serious allegations—including non-disclosure, concealment of material facts, and fraudulent conduct—the complainant has called on regulatory authorities to immediately suspend the IPO process for Rosmerta Digital Services Ltd. The request emphasizes the need for a comprehensive investigation to protect retail investors and uphold the integrity of the capital markets.