National Insurance IPO stayed after disagreement with IDRA

Securities and Exchanges Commission has stayed the Initial Public Offering (IPO) of National Insurance following its disagreement with the Insurance Development and Regulatory Authority (IDRA).

The decision taken during the commission’s meeting on Monday was initiated by a plea for stay by the insurance company which was supposed to issue IPO on Tuesday.

The insurance company allegedly had conflicts with the regulatory authorities over raising more capital after it secured the SEC nod to issue IPO and raise funds from the capital market.

However, the SEC only said the IPO was stayed due to ‘unavoidable circumstances’.

IDRA alleged that National Insurance was not cleared to raise their authorised or paid-up capital which it was trying to do. Also the capital it declared in the IPO did not match what was mentioned in their memorandum or article of association.

It wrote to the SEC to take steps who replied that they approved the IPO based on papers submitted by the company and its issue manager. They also said they had nothing to do and said IDRA can take steps against the company if it violates the insurance act.

IDRA issued a show cause notice to National Insurance authorities who in turn asked for a stay on issuance of the IPO.