SEBI is investigating several companies for misusing funds raised through rights issues, after receiving whistleblower complaints. Promoters are accused of diverting the money to relatives or personal use instead of business expansion. Most of the affected companies are small, and the misuse often involves buying property. Unlike other scams, this type of fraud doesn’t immediately impact stock prices, making it harder to detect. Whistleblower tips are crucial in uncovering these cases.
Source: NDTV Profit
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