The Securities and Exchange Board of India (Sebi) has barred Birla Pacific Medspa Ltd (BPML), Yashovardhan Birla and eight others from the securities market for two years for mis-utilising IPO proceeds.

BPML, which came out with offer documents in March 2011, had floated its over Rs 65-core initial public offering (IPO) in June 2011.

The regulator found that the company made mis-statements in the prospectus in respect of the objects of the IPO.

In a 61-page order that was given last Friday, Sebi wholetime member Ananta Barua said while around 75 per cent of the IPO proceeds were promised to be utilised in setting up Evolve Medspa centres under the “objects of the issue” in the prospectus, no such centres have been set up. While 15 such centres were promised to be set up by the end of March 2012, not even a single centre was set up by that time.

Sebi added that 50 per cent of the IPO proceeds, or Rs 31.54 crore, were deployed as inter-corporate deposits (ICDs) to group companies, of which 60 per cent of ICDs were never returned to the company. However, the prospectus had permitted the interim deployment of proceeds as an investment in liquid instruments only and deployment of funds as ICDs was not allowed.

The order said this decision was taken on the “pretext” that the macro-economic conditions were not appropriate to set up Evolve Centers and this decision was taken within 12 days from the signing of prospectus.